Correlation Between PT Indofood and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both PT Indofood 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 PT Indofood and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indofood Sukses and Weha Transportasi Indonesia, you can compare the effects of market volatilities on PT Indofood 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 PT Indofood with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Weha Transportasi.
Diversification Opportunities for PT Indofood and Weha Transportasi
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between INDF and Weha is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and PT Indofood 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 PT Indofood Sukses 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 PT Indofood i.e., PT Indofood and Weha Transportasi go up and down completely randomly.
Pair Corralation between PT Indofood and Weha Transportasi
Assuming the 90 days trading horizon PT Indofood Sukses is expected to generate 0.81 times more return on investment than Weha Transportasi. However, PT Indofood Sukses is 1.24 times less risky than Weha Transportasi. It trades about 0.03 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 757,500 in PT Indofood Sukses on August 30, 2024 and sell it today you would earn a total of 7,500 from holding PT Indofood Sukses or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indofood Sukses vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| PT Indofood Sukses |
| Weha Transportasi |
PT Indofood and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Weha Transportasi
The main advantage of trading using opposite PT Indofood and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood 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.| PT Indofood vs. Astra International Tbk | PT Indofood vs. Unilever Indonesia Tbk | PT Indofood vs. Telkom Indonesia Tbk | PT Indofood vs. Bank Mandiri Persero |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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