Correlation Between Humpuss Intermoda and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Humpuss Intermoda 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 Humpuss Intermoda and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humpuss Intermoda Transportasi and Weha Transportasi Indonesia, you can compare the effects of market volatilities on Humpuss Intermoda 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 Humpuss Intermoda with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humpuss Intermoda and Weha Transportasi.
Diversification Opportunities for Humpuss Intermoda and Weha Transportasi
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humpuss and Weha is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Humpuss Intermoda Transportasi and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and Humpuss Intermoda 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 Humpuss Intermoda Transportasi 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 Humpuss Intermoda i.e., Humpuss Intermoda and Weha Transportasi go up and down completely randomly.
Pair Corralation between Humpuss Intermoda and Weha Transportasi
Assuming the 90 days trading horizon Humpuss Intermoda Transportasi is expected to generate 1.57 times more return on investment than Weha Transportasi. However, Humpuss Intermoda is 1.57 times more volatile than Weha Transportasi Indonesia. It trades about 0.1 of its potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about -0.21 per unit of risk. If you would invest 40,600 in Humpuss Intermoda Transportasi on September 3, 2024 and sell it today you would earn a total of 2,000 from holding Humpuss Intermoda Transportasi or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humpuss Intermoda Transportasi vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Humpuss Intermoda |
| Weha Transportasi |
Humpuss Intermoda and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humpuss Intermoda and Weha Transportasi
The main advantage of trading using opposite Humpuss Intermoda and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humpuss Intermoda 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.| Humpuss Intermoda vs. Weha Transportasi Indonesia | Humpuss Intermoda vs. Mitra Pinasthika Mustika | Humpuss Intermoda vs. Jakarta Int Hotels | Humpuss Intermoda 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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