Correlation Between Capital Financial and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Capital Financial and Weha Transportasi 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 Capital Financial and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Financial Indonesia and Weha Transportasi Indonesia, you can compare the effects of market volatilities on Capital Financial and Weha Transportasi 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 Capital Financial with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Financial and Weha Transportasi.
Diversification Opportunities for Capital Financial and Weha Transportasi
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and Weha is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Capital Financial Indonesia and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and Capital Financial 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 Capital Financial Indonesia are associated (or correlated) with Weha Transportasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weha Transportasi has no effect on the direction of Capital Financial i.e., Capital Financial and Weha Transportasi go up and down completely randomly.
Pair Corralation between Capital Financial and Weha Transportasi
Assuming the 90 days trading horizon Capital Financial Indonesia is expected to under-perform the Weha Transportasi. But the stock apears to be less risky and, when comparing its historical volatility, Capital Financial Indonesia is 1.13 times less risky than Weha Transportasi. The stock trades about -0.02 of its potential returns per unit of risk. The Weha Transportasi Indonesia is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,600 in Weha Transportasi Indonesia on September 12, 2024 and sell it today you would earn a total of 1,600 from holding Weha Transportasi Indonesia or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Financial Indonesia vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Capital Financial |
| Weha Transportasi |
Capital Financial and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Financial and Weha Transportasi
The main advantage of trading using opposite Capital Financial and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Financial position performs unexpectedly, Weha Transportasi 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 Weha Transportasi will offset losses from the drop in Weha Transportasi's long position.| Capital Financial vs. Pacific Strategic Financial | Capital Financial vs. Bk Harda Internasional | Capital Financial vs. Indoritel Makmur Internasional | Capital Financial vs. Bank Sinarmas Tbk |
| Weha Transportasi vs. PT Temas Tbk | Weha Transportasi vs. Dosni Roha Indonesia | Weha Transportasi vs. Rig Tenders Tbk | Weha Transportasi vs. Samudera Indonesia 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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