Correlation Between Communication Cable and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Communication Cable 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 Communication Cable and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Communication Cable Systems and Weha Transportasi Indonesia, you can compare the effects of market volatilities on Communication Cable 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 Communication Cable with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication Cable and Weha Transportasi.
Diversification Opportunities for Communication Cable and Weha Transportasi
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Communication and Weha is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Communication Cable Systems and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and Communication Cable 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 Communication Cable Systems 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 Communication Cable i.e., Communication Cable and Weha Transportasi go up and down completely randomly.
Pair Corralation between Communication Cable and Weha Transportasi
Assuming the 90 days trading horizon Communication Cable Systems is expected to generate 2.56 times more return on investment than Weha Transportasi. However, Communication Cable is 2.56 times more volatile than Weha Transportasi Indonesia. It trades about 0.08 of its potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about -0.36 per unit of risk. If you would invest 24,600 in Communication Cable Systems on August 30, 2024 and sell it today you would earn a total of 2,000 from holding Communication Cable Systems or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Communication Cable Systems vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Communication Cable |
| Weha Transportasi |
Communication Cable and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication Cable and Weha Transportasi
The main advantage of trading using opposite Communication Cable and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication Cable 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.| Communication Cable vs. Berkah Prima Perkasa | Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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