Correlation Between Wulandari Bangun and Tira Austenite

Can any of the company-specific risk be diversified away by investing in both Wulandari Bangun and Tira Austenite 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 Tira Austenite 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 Tira Austenite Tbk, you can compare the effects of market volatilities on Wulandari Bangun and Tira Austenite 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 Tira Austenite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wulandari Bangun and Tira Austenite.

Diversification Opportunities for Wulandari Bangun and Tira Austenite

-0.35

Correlation Coefficient

Wulandari Bangun  Tira Austenite

Very good diversification

The 3 months correlation between Wulandari and Tira is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wulandari Bangun Laksana and Tira Austenite Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tira Austenite 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 Tira Austenite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tira Austenite Tbk has no effect on the direction of Wulandari Bangun i.e., Wulandari Bangun and Tira Austenite go up and down completely randomly.

Pair Corralation between Wulandari Bangun and Tira Austenite

Assuming the 90 days trading horizon Wulandari Bangun Laksana is expected to under-perform the Tira Austenite. But the stock apears to be less risky and, when comparing its historical volatility, Wulandari Bangun Laksana is 2.84 times less risky than Tira Austenite. The stock trades about -0.08 of its potential returns per unit of risk. The Tira Austenite Tbk is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  42,000  in Tira Austenite Tbk on September 16, 2024 and sell it today you would lose (4,800) from holding Tira Austenite Tbk or give up 11.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Wulandari Bangun Laksana  vs.  Tira Austenite Tbk

Wulandari Bangun Laksana

Risk-Adjusted Performance

0 of 100

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 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.

Tira Austenite Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tira Austenite Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Tira Austenite 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 Wulandari Bangun and Tira Austenite

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

The idea behind Wulandari Bangun Laksana and Tira Austenite 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.