Correlation Between PT Cilacap and Wir Asia

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

By analyzing existing cross correlation between PT Cilacap Samudera and Wir Asia Tbk, you can compare the effects of market volatilities on PT Cilacap and Wir Asia 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 Cilacap with a short position of Wir Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Cilacap and Wir Asia.

Diversification Opportunities for PT Cilacap and Wir Asia

0.11

Correlation Coefficient

PT Cilacap  Wir Asia

Average diversification

The 3 months correlation between ASHA and Wir is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding PT Cilacap Samudera and Wir Asia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wir Asia Tbk and PT Cilacap 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 Cilacap Samudera are associated (or correlated) with Wir Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wir Asia Tbk has no effect on the direction of PT Cilacap i.e., PT Cilacap and Wir Asia go up and down completely randomly.

Pair Corralation between PT Cilacap and Wir Asia

Assuming the 90 days trading horizon PT Cilacap Samudera is expected to under-perform the Wir Asia. In addition to that, PT Cilacap is 1.16 times more volatile than Wir Asia Tbk. It trades about -0.05 of its total potential returns per unit of risk. Wir Asia Tbk is currently generating about 0.04 per unit of volatility. If you would invest  8,800  in Wir Asia Tbk on September 14, 2024 and sell it today you would earn a total of  600.00  from holding Wir Asia Tbk or generate 6.82% return on investment over 90 days.

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

PT Cilacap Samudera  vs.  Wir Asia Tbk

PT Cilacap Samudera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Cilacap Samudera 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.

Wir Asia Tbk

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wir Asia Tbk are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Wir Asia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PT Cilacap and Wir Asia

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

The idea behind PT Cilacap Samudera and Wir Asia 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.