Correlation Between Archi Indonesia and Widodo Makmur

Can any of the company-specific risk be diversified away by investing in both Archi Indonesia and Widodo Makmur 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 Archi Indonesia and Widodo Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Archi Indonesia Tbk and Widodo Makmur Perkasa, you can compare the effects of market volatilities on Archi Indonesia and Widodo Makmur 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 Archi Indonesia with a short position of Widodo Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archi Indonesia and Widodo Makmur.

Diversification Opportunities for Archi Indonesia and Widodo Makmur

0.0

Correlation Coefficient

Archi Indonesia  Widodo Makmur

Pay attention - limited upside

The 3 months correlation between Archi and Widodo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Archi Indonesia Tbk and Widodo Makmur Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Widodo Makmur Perkasa and Archi Indonesia 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 Archi Indonesia Tbk are associated (or correlated) with Widodo Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Widodo Makmur Perkasa has no effect on the direction of Archi Indonesia i.e., Archi Indonesia and Widodo Makmur go up and down completely randomly.

Pair Corralation between Archi Indonesia and Widodo Makmur

If you would invest  1,200  in Widodo Makmur Perkasa on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Widodo Makmur Perkasa or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Archi Indonesia Tbk  vs.  Widodo Makmur Perkasa

Archi Indonesia Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Archi Indonesia Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Widodo Makmur Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Widodo Makmur Perkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Widodo Makmur is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Archi Indonesia and Widodo Makmur

The main advantage of trading using opposite Archi Indonesia and Widodo Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archi Indonesia position performs unexpectedly, Widodo Makmur 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 Widodo Makmur will offset losses from the drop in Widodo Makmur's long position.

The idea behind Archi Indonesia Tbk and Widodo Makmur Perkasa pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.