Correlation Between Waskita Beton and Pembangunan Perumahan

Can any of the company-specific risk be diversified away by investing in both Waskita Beton and Pembangunan Perumahan 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 Pembangunan Perumahan 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 Pembangunan Perumahan PT, you can compare the effects of market volatilities on Waskita Beton and Pembangunan Perumahan 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 Pembangunan Perumahan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waskita Beton and Pembangunan Perumahan.

Diversification Opportunities for Waskita Beton and Pembangunan Perumahan

0.77

Correlation Coefficient

Waskita Beton  Pembangunan Perumahan

Poor diversification

The 3 months correlation between Waskita and Pembangunan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Waskita Beton Precast and Pembangunan Perumahan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembangunan Perumahan 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 Pembangunan Perumahan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembangunan Perumahan has no effect on the direction of Waskita Beton i.e., Waskita Beton and Pembangunan Perumahan go up and down completely randomly.

Pair Corralation between Waskita Beton and Pembangunan Perumahan

Assuming the 90 days trading horizon Waskita Beton Precast is expected to under-perform the Pembangunan Perumahan. In addition to that, Waskita Beton is 1.83 times more volatile than Pembangunan Perumahan PT. It trades about -0.12 of its total potential returns per unit of risk. Pembangunan Perumahan PT is currently generating about -0.13 per unit of volatility. If you would invest  45,400  in Pembangunan Perumahan PT on September 15, 2024 and sell it today you would lose (7,000) from holding Pembangunan Perumahan PT or give up 15.42% 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.  Pembangunan Perumahan PT

Waskita Beton Precast

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Waskita Beton Precast 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.

Pembangunan Perumahan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pembangunan Perumahan PT 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.

Pair Trading with Waskita Beton and Pembangunan Perumahan

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

The idea behind Waskita Beton Precast and Pembangunan Perumahan PT 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .