Correlation Between PT Data and Wir Asia

Can any of the company-specific risk be diversified away by investing in both PT Data 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 Data 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 Data Sinergitama and Wir Asia Tbk, you can compare the effects of market volatilities on PT Data 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 Data with a short position of Wir Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Data and Wir Asia.

Diversification Opportunities for PT Data and Wir Asia

0.76

Correlation Coefficient

PT Data  Wir Asia

Poor diversification

The 3 months correlation between ELIT and Wir is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama 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 Data 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 Data Sinergitama 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 Data i.e., PT Data and Wir Asia go up and down completely randomly.

Pair Corralation between PT Data and Wir Asia

Assuming the 90 days trading horizon PT Data Sinergitama is expected to generate 1.34 times more return on investment than Wir Asia. However, PT Data is 1.34 times more volatile than Wir Asia Tbk. It trades about 0.26 of its potential returns per unit of risk. Wir Asia Tbk is currently generating about 0.16 per unit of risk. If you would invest  11,300  in PT Data Sinergitama on November 30, 2024 and sell it today you would earn a total of  16,500  from holding PT Data Sinergitama or generate 146.02% return on investment over 90 days.

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

PT Data Sinergitama  vs.  Wir Asia Tbk

PT Data Sinergitama

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PT Data Sinergitama are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Data disclosed solid returns over the last few months and may actually be approaching a breakup point.

Wir Asia Tbk

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wir Asia Tbk are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Wir Asia disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Data and Wir Asia

The main advantage of trading using opposite PT Data and Wir Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Data 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 Data Sinergitama 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.