Correlation Between Champion Pacific and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Champion Pacific 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 Champion Pacific and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Pacific Indonesia and Weha Transportasi Indonesia, you can compare the effects of market volatilities on Champion Pacific 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 Champion Pacific with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Pacific and Weha Transportasi.
Diversification Opportunities for Champion Pacific and Weha Transportasi
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Champion and Weha is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Champion Pacific 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 Champion Pacific 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 Champion Pacific 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 Champion Pacific i.e., Champion Pacific and Weha Transportasi go up and down completely randomly.
Pair Corralation between Champion Pacific and Weha Transportasi
Assuming the 90 days trading horizon Champion Pacific is expected to generate 1.56 times less return on investment than Weha Transportasi. But when comparing it to its historical volatility, Champion Pacific Indonesia is 1.28 times less risky than Weha Transportasi. It trades about 0.07 of its potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,938 in Weha Transportasi Indonesia on September 3, 2024 and sell it today you would earn a total of 2,362 from holding Weha Transportasi Indonesia or generate 23.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Pacific Indonesia vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Champion Pacific Ind |
| Weha Transportasi |
Champion Pacific and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Pacific and Weha Transportasi
The main advantage of trading using opposite Champion Pacific and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Pacific 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.| Champion Pacific vs. Timah Persero Tbk | Champion Pacific vs. Semen Indonesia Persero | Champion Pacific vs. Mitra Pinasthika Mustika | Champion Pacific vs. Jakarta Int Hotels |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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