Correlation Between Solusi Sinergi and Wir Asia

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

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

Diversification Opportunities for Solusi Sinergi and Wir Asia

0.84

Correlation Coefficient

Solusi Sinergi  Wir Asia

Very poor diversification

The 3 months correlation between Solusi and Wir is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Solusi Sinergi Digital 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 Solusi Sinergi 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 Solusi Sinergi Digital 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 Solusi Sinergi i.e., Solusi Sinergi and Wir Asia go up and down completely randomly.

Pair Corralation between Solusi Sinergi and Wir Asia

If you would invest  8,400  in Wir Asia Tbk on November 30, 2024 and sell it today you would earn a total of  3,700  from holding Wir Asia Tbk or generate 44.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	2.5%
Values	Daily Returns

Solusi Sinergi Digital  vs.  Wir Asia Tbk

Solusi Sinergi Digital

Risk-Adjusted Performance

Strong

Over the last 90 days Solusi Sinergi Digital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite weak forward-looking signals, Solusi Sinergi 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 10 (%) 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 Solusi Sinergi and Wir Asia

The main advantage of trading using opposite Solusi Sinergi and Wir Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solusi Sinergi 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 Solusi Sinergi Digital 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.