Correlation Between Hartadinata Abadi and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Hartadinata Abadi 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 Hartadinata Abadi and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartadinata Abadi Tbk and Weha Transportasi Indonesia, you can compare the effects of market volatilities on Hartadinata Abadi 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 Hartadinata Abadi with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartadinata Abadi and Weha Transportasi.
Diversification Opportunities for Hartadinata Abadi and Weha Transportasi
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartadinata and Weha is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hartadinata Abadi Tbk and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and Hartadinata Abadi 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 Hartadinata Abadi Tbk 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 Hartadinata Abadi i.e., Hartadinata Abadi and Weha Transportasi go up and down completely randomly.
Pair Corralation between Hartadinata Abadi and Weha Transportasi
Assuming the 90 days trading horizon Hartadinata Abadi Tbk is expected to under-perform the Weha Transportasi. But the stock apears to be less risky and, when comparing its historical volatility, Hartadinata Abadi Tbk is 1.06 times less risky than Weha Transportasi. The stock trades about -0.47 of its potential returns per unit of risk. The Weha Transportasi Indonesia is currently generating about -0.37 of returns per unit of risk over similar time horizon. If you would invest 16,000 in Weha Transportasi Indonesia on August 24, 2024 and sell it today you would lose (3,000) from holding Weha Transportasi Indonesia or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hartadinata Abadi Tbk vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Hartadinata Abadi Tbk |
| Weha Transportasi |
Hartadinata Abadi and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartadinata Abadi and Weha Transportasi
The main advantage of trading using opposite Hartadinata Abadi and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartadinata Abadi 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.| Hartadinata Abadi vs. Steel Pipe Industry | Hartadinata Abadi vs. Puradelta Lestari PT | Hartadinata Abadi vs. Jasa Armada Indonesia | Hartadinata Abadi vs. Integra Indocabinet 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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