Correlation Between Energi Mega and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Energi Mega 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 Energi Mega and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energi Mega Persada and Weha Transportasi Indonesia, you can compare the effects of market volatilities on Energi Mega 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 Energi Mega with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energi Mega and Weha Transportasi.
Diversification Opportunities for Energi Mega and Weha Transportasi
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Energi and Weha is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Energi Mega Persada and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and Energi Mega 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 Energi Mega Persada 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 Energi Mega i.e., Energi Mega and Weha Transportasi go up and down completely randomly.
Pair Corralation between Energi Mega and Weha Transportasi
Assuming the 90 days trading horizon Energi Mega Persada is expected to generate 1.72 times more return on investment than Weha Transportasi. However, Energi Mega is 1.72 times more volatile than Weha Transportasi Indonesia. It trades about 0.09 of its potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about 0.09 per unit of risk. If you would invest 17,700 in Energi Mega Persada on September 3, 2024 and sell it today you would earn a total of 6,500 from holding Energi Mega Persada or generate 36.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energi Mega Persada vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Energi Mega Persada |
| Weha Transportasi |
Energi Mega and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energi Mega and Weha Transportasi
The main advantage of trading using opposite Energi Mega and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energi Mega 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.| Energi Mega vs. Weha Transportasi Indonesia | Energi Mega vs. Mitra Pinasthika Mustika | Energi Mega vs. Jakarta Int Hotels | Energi Mega vs. Asuransi Harta Aman |
| Weha Transportasi vs. Intanwijaya Internasional Tbk | Weha Transportasi vs. Champion Pacific Indonesia | Weha Transportasi vs. Mitra Pinasthika Mustika | Weha Transportasi vs. Jakarta Int Hotels |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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