Correlation Between Wahana Inti and Nanotech Indonesia
Can any of the company-specific risk be diversified away by investing in both Wahana Inti and Nanotech Indonesia 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 Nanotech Indonesia 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 Nanotech Indonesia Global, you can compare the effects of market volatilities on Wahana Inti and Nanotech Indonesia 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 Nanotech Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wahana Inti and Nanotech Indonesia.
Diversification Opportunities for Wahana Inti and Nanotech Indonesia
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wahana and Nanotech is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Inti MakmurTbk and Nanotech Indonesia Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanotech Indonesia Global 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 Nanotech Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanotech Indonesia Global has no effect on the direction of Wahana Inti i.e., Wahana Inti and Nanotech Indonesia go up and down completely randomly.
Pair Corralation between Wahana Inti and Nanotech Indonesia
Assuming the 90 days trading horizon Wahana Inti MakmurTbk is expected to generate 0.56 times more return on investment than Nanotech Indonesia. However, Wahana Inti MakmurTbk is 1.79 times less risky than Nanotech Indonesia. It trades about -0.1 of its potential returns per unit of risk. Nanotech Indonesia Global is currently generating about -0.2 per unit of risk. If you would invest 7,400 in Wahana Inti MakmurTbk on December 8, 2024 and sell it today you would lose (500.00) from holding Wahana Inti MakmurTbk or give up 6.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wahana Inti MakmurTbk vs. Nanotech Indonesia Global
Performance |
| Timeline |
| Wahana Inti MakmurTbk |
| Nanotech Indonesia Global |
Wahana Inti and Nanotech Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wahana Inti and Nanotech Indonesia
The main advantage of trading using opposite Wahana Inti and Nanotech Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wahana Inti position performs unexpectedly, Nanotech Indonesia 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 Nanotech Indonesia will offset losses from the drop in Nanotech Indonesia's long position.| Wahana Inti vs. Indo Pureco Pratama | ||
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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