Correlation Between Waskita Karya and Perusahaan Gas

Can any of the company-specific risk be diversified away by investing in both Waskita Karya and Perusahaan Gas 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 Karya and Perusahaan Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Waskita Karya Persero and Perusahaan Gas Negara, you can compare the effects of market volatilities on Waskita Karya and Perusahaan Gas 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 Karya with a short position of Perusahaan Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waskita Karya and Perusahaan Gas.

Diversification Opportunities for Waskita Karya and Perusahaan Gas

0.0

Correlation Coefficient

Waskita Karya  Perusahaan Gas

Pay attention - limited upside

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

Pair Corralation between Waskita Karya and Perusahaan Gas

If you would invest  153,000  in Perusahaan Gas Negara on September 5, 2024 and sell it today you would earn a total of  4,500  from holding Perusahaan Gas Negara or generate 2.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Waskita Karya Persero  vs.  Perusahaan Gas Negara

Waskita Karya Persero

Risk-Adjusted Performance

0 of 100

Very Weak

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

Perusahaan Gas Negara

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Perusahaan Gas Negara are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Perusahaan Gas 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 Waskita Karya and Perusahaan Gas

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

The idea behind Waskita Karya Persero and Perusahaan Gas Negara 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.