Correlation Between Waskita Beton and Wijaya Karya
Can any of the company-specific risk be diversified away by investing in both Waskita Beton and Wijaya Karya 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 Wijaya Karya 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 Wijaya Karya Bangunan, you can compare the effects of market volatilities on Waskita Beton and Wijaya Karya 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 Wijaya Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waskita Beton and Wijaya Karya.
Diversification Opportunities for Waskita Beton and Wijaya Karya
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Waskita and Wijaya is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Waskita Beton Precast and Wijaya Karya Bangunan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wijaya Karya Bangunan 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 Wijaya Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wijaya Karya Bangunan has no effect on the direction of Waskita Beton i.e., Waskita Beton and Wijaya Karya go up and down completely randomly.
Pair Corralation between Waskita Beton and Wijaya Karya
Assuming the 90 days trading horizon Waskita Beton Precast is expected to generate 1.95 times more return on investment than Wijaya Karya. However, Waskita Beton is 1.95 times more volatile than Wijaya Karya Bangunan. It trades about -0.06 of its potential returns per unit of risk. Wijaya Karya Bangunan is currently generating about -0.26 per unit of risk. If you would invest 1,900 in Waskita Beton Precast on August 29, 2024 and sell it today you would lose (100.00) from holding Waskita Beton Precast or give up 5.26% 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. Wijaya Karya Bangunan
Performance |
| Timeline |
| Waskita Beton Precast |
| Wijaya Karya Bangunan |
Waskita Beton and Wijaya Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waskita Beton and Wijaya Karya
The main advantage of trading using opposite Waskita Beton and Wijaya Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waskita Beton position performs unexpectedly, Wijaya Karya 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 Wijaya Karya will offset losses from the drop in Wijaya Karya's long position.| Waskita Beton vs. City Retail Developments | Waskita Beton vs. Alumindo Light Metal | Waskita Beton vs. Capital Financial Indonesia | Waskita Beton vs. Indonesian Tobacco Tbk |
| Wijaya Karya vs. Wijaya Karya Beton | Wijaya Karya vs. Waskita Beton Precast | Wijaya Karya vs. Pembangunan Perumahan PT | Wijaya Karya vs. Puradelta Lestari PT |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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