Correlation Between Waskita Beton and City Retail
Can any of the company-specific risk be diversified away by investing in both Waskita Beton and City Retail at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Waskita Beton and City Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waskita Beton Precast and City Retail Developments, you can compare the effects of market volatilities on Waskita Beton and City Retail and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Waskita Beton with a short position of City Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waskita Beton and City Retail.
Diversification Opportunities for Waskita Beton and City Retail
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Waskita and City is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Waskita Beton Precast and City Retail Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Retail Developments and Waskita Beton is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Waskita Beton Precast are associated (or correlated) with City Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Retail Developments has no effect on the direction of Waskita Beton i.e., Waskita Beton and City Retail go up and down completely randomly.
Pair Corralation between Waskita Beton and City Retail
Assuming the 90 days trading horizon Waskita Beton Precast is expected to under-perform the City Retail. In addition to that, Waskita Beton is 3.7 times more volatile than City Retail Developments. It trades about -0.24 of its total potential returns per unit of risk. City Retail Developments is currently generating about -0.17 per unit of volatility. If you would invest 13,900 in City Retail Developments on September 1, 2024 and sell it today you would lose (400.00) from holding City Retail Developments or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waskita Beton Precast vs. City Retail Developments
Performance |
| Timeline |
| Waskita Beton Precast |
| City Retail Developments |
Waskita Beton and City Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waskita Beton and City Retail
The main advantage of trading using opposite Waskita Beton and City Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waskita Beton position performs unexpectedly, City Retail can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in City Retail will offset losses from the drop in City Retail's long position.| Waskita Beton vs. Intermedia Capital Tbk | Waskita Beton vs. Bank Ocbc Nisp | Waskita Beton vs. Krakatau Steel Persero | Waskita Beton vs. First Media Tbk |
| City Retail vs. Lippo Cikarang Tbk | City Retail vs. Lippo Karawaci Tbk | City Retail vs. Intiland Development Tbk | City Retail vs. Mitra Pinasthika Mustika |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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