Correlation Between Wulandari Bangun and Archi Indonesia

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Wulandari Bangun and Archi Indonesia 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 Wulandari Bangun and Archi Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wulandari Bangun Laksana and Archi Indonesia Tbk, you can compare the effects of market volatilities on Wulandari Bangun and Archi Indonesia 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 Wulandari Bangun with a short position of Archi Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wulandari Bangun and Archi Indonesia.

Diversification Opportunities for Wulandari Bangun and Archi Indonesia

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Wulandari and Archi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Wulandari Bangun Laksana and Archi Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archi Indonesia Tbk and Wulandari Bangun 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 Wulandari Bangun Laksana are associated (or correlated) with Archi Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archi Indonesia Tbk has no effect on the direction of Wulandari Bangun i.e., Wulandari Bangun and Archi Indonesia go up and down completely randomly.

Pair Corralation between Wulandari Bangun and Archi Indonesia

Assuming the 90 days trading horizon Wulandari Bangun Laksana is expected to generate 0.82 times more return on investment than Archi Indonesia. However, Wulandari Bangun Laksana is 1.22 times less risky than Archi Indonesia. It trades about -0.06 of its potential returns per unit of risk. Archi Indonesia Tbk is currently generating about -0.11 per unit of risk. If you would invest  5,100  in Wulandari Bangun Laksana on September 19, 2024 and sell it today you would lose (100.00) from holding Wulandari Bangun Laksana or give up 1.96% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Wulandari Bangun Laksana  vs.  Archi Indonesia Tbk

 Performance 
       Timeline  
Wulandari Bangun Laksana 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Wulandari Bangun Laksana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Archi Indonesia Tbk 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

Wulandari Bangun and Archi Indonesia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Wulandari Bangun and Archi Indonesia

The main advantage of trading using opposite Wulandari Bangun and Archi Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wulandari Bangun position performs unexpectedly, Archi Indonesia 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 Archi Indonesia will offset losses from the drop in Archi Indonesia's long position.
The idea behind Wulandari Bangun Laksana and Archi Indonesia Tbk 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

Other Complementary Tools

Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like