Correlation Between Perusahaan Gas and Waskita Karya

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

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

Diversification Opportunities for Perusahaan Gas and Waskita Karya

0.0

Correlation Coefficient

Perusahaan Gas  Waskita Karya

Pay attention - limited upside

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

Pair Corralation between Perusahaan Gas and Waskita Karya

If you would invest  20,200  in Waskita Karya Persero on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Waskita Karya Persero or generate 0.0% return on investment over 90 days.

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

Perusahaan Gas Negara  vs.  Waskita Karya Persero

Perusahaan Gas Negara

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perusahaan Gas Negara has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

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.

Pair Trading with Perusahaan Gas and Waskita Karya

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

The idea behind Perusahaan Gas Negara and Waskita Karya Persero 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.