Correlation Between Waskita Beton and FKS Food
Can any of the company-specific risk be diversified away by investing in both Waskita Beton and FKS Food 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 Waskita Beton and FKS Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waskita Beton Precast and FKS Food Sejahtera, you can compare the effects of market volatilities on Waskita Beton and FKS Food 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 Waskita Beton with a short position of FKS Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waskita Beton and FKS Food.
Diversification Opportunities for Waskita Beton and FKS Food
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Waskita and FKS is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Waskita Beton Precast and FKS Food Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FKS Food Sejahtera and Waskita Beton 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 Waskita Beton Precast are associated (or correlated) with FKS Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FKS Food Sejahtera has no effect on the direction of Waskita Beton i.e., Waskita Beton and FKS Food go up and down completely randomly.
Pair Corralation between Waskita Beton and FKS Food
Assuming the 90 days trading horizon Waskita Beton Precast is expected to under-perform the FKS Food. In addition to that, Waskita Beton is 2.23 times more volatile than FKS Food Sejahtera. It trades about -0.18 of its total potential returns per unit of risk. FKS Food Sejahtera is currently generating about -0.18 per unit of volatility. If you would invest 11,700 in FKS Food Sejahtera on December 2, 2024 and sell it today you would lose (2,000) from holding FKS Food Sejahtera or give up 17.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Waskita Beton Precast vs. FKS Food Sejahtera
Performance |
Timeline |
Waskita Beton Precast |
FKS Food Sejahtera |
Waskita Beton and FKS Food Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Waskita Beton and FKS Food
The main advantage of trading using opposite Waskita Beton and FKS Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waskita Beton position performs unexpectedly, FKS Food 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 FKS Food will offset losses from the drop in FKS Food's long position.Waskita Beton vs. Indonesian Tobacco Tbk | Waskita Beton vs. Mahaka Media Tbk | Waskita Beton vs. Lippo General Insurance | Waskita Beton vs. Indosterling Technomedia Tbk |
FKS Food vs. Alam Sutera Realty | FKS Food vs. Sentul City Tbk | FKS Food vs. Gajah Tunggal Tbk | FKS Food vs. Akr Corporindo Tbk |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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