Correlation Between Wahana Inti and Mahkota Group
Can any of the company-specific risk be diversified away by investing in both Wahana Inti and Mahkota Group 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 Wahana Inti and Mahkota Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wahana Inti MakmurTbk and Mahkota Group Tbk, you can compare the effects of market volatilities on Wahana Inti and Mahkota Group 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 Wahana Inti with a short position of Mahkota Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wahana Inti and Mahkota Group.
Diversification Opportunities for Wahana Inti and Mahkota Group
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wahana and Mahkota is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Inti MakmurTbk and Mahkota Group Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahkota Group Tbk and Wahana Inti 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 Wahana Inti MakmurTbk are associated (or correlated) with Mahkota Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahkota Group Tbk has no effect on the direction of Wahana Inti i.e., Wahana Inti and Mahkota Group go up and down completely randomly.
Pair Corralation between Wahana Inti and Mahkota Group
Assuming the 90 days trading horizon Wahana Inti MakmurTbk is expected to generate 2.53 times more return on investment than Mahkota Group. However, Wahana Inti is 2.53 times more volatile than Mahkota Group Tbk. It trades about 0.04 of its potential returns per unit of risk. Mahkota Group Tbk is currently generating about 0.02 per unit of risk. If you would invest 7,800 in Wahana Inti MakmurTbk on September 12, 2024 and sell it today you would earn a total of 1,100 from holding Wahana Inti MakmurTbk or generate 14.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Wahana Inti MakmurTbk vs. Mahkota Group Tbk
Performance |
| Timeline |
| Wahana Inti MakmurTbk |
| Mahkota Group Tbk |
Wahana Inti and Mahkota Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wahana Inti and Mahkota Group
The main advantage of trading using opposite Wahana Inti and Mahkota Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wahana Inti position performs unexpectedly, Mahkota Group 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 Mahkota Group will offset losses from the drop in Mahkota Group's long position.| Wahana Inti vs. Mahkota Group Tbk | Wahana Inti vs. Palma Serasih PT | Wahana Inti vs. Cisadane Sawit Raya | Wahana Inti vs. Diamond Food Indonesia |
| Mahkota Group vs. Austindo Nusantara Jaya | Mahkota Group vs. Garudafood Putra Putri | Mahkota Group vs. Provident Agro Tbk | Mahkota Group vs. Dharma Satya Nusantara |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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