Correlation Between Wir Asia and PT Data

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

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

Diversification Opportunities for Wir Asia and PT Data

0.74

Correlation Coefficient

Wir Asia  PT Data

Poor diversification

The 3 months correlation between Wir and ELIT is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wir Asia Tbk and PT Data Sinergitama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Data Sinergitama and Wir Asia 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 Wir Asia Tbk are associated (or correlated) with PT Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Data Sinergitama has no effect on the direction of Wir Asia i.e., Wir Asia and PT Data go up and down completely randomly.

Pair Corralation between Wir Asia and PT Data

Assuming the 90 days trading horizon Wir Asia is expected to generate 1.95 times less return on investment than PT Data. But when comparing it to its historical volatility, Wir Asia Tbk is 1.35 times less risky than PT Data. It trades about 0.17 of its potential returns per unit of risk. PT Data Sinergitama is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  11,200  in PT Data Sinergitama on November 29, 2024 and sell it today you would earn a total of  15,200  from holding PT Data Sinergitama or generate 135.71% return on investment over 90 days.

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

Wir Asia Tbk  vs.  PT Data Sinergitama

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 13 (%) 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.

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 19 (%) 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.

Pair Trading with Wir Asia and PT Data

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

The idea behind Wir Asia Tbk and PT Data Sinergitama 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.