Correlation Between PT Semen and WeTrade Group

Can any of the company-specific risk be diversified away by investing in both PT Semen and WeTrade Group 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 PT Semen and WeTrade Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Semen Indonesia and WeTrade Group Ordinary, you can compare the effects of market volatilities on PT Semen and WeTrade Group 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 PT Semen with a short position of WeTrade Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Semen and WeTrade Group.

Diversification Opportunities for PT Semen and WeTrade Group

-0.56

Correlation Coefficient

PT Semen  WeTrade Group

Excellent diversification

The 3 months correlation between PSGTF and WeTrade is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Semen Indonesia and WeTrade Group Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WeTrade Group Ordinary and PT Semen 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 PT Semen Indonesia are associated (or correlated) with WeTrade Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WeTrade Group Ordinary has no effect on the direction of PT Semen i.e., PT Semen and WeTrade Group go up and down completely randomly.

Pair Corralation between PT Semen and WeTrade Group

If you would invest (100.00) in WeTrade Group Ordinary on September 12, 2024 and sell it today you would earn a total of  100.00  from holding WeTrade Group Ordinary or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

PT Semen Indonesia  vs.  WeTrade Group Ordinary

PT Semen Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Semen Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

WeTrade Group Ordinary

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WeTrade Group Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WeTrade Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Semen and WeTrade Group

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

The idea behind PT Semen Indonesia and WeTrade Group Ordinary 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.