Correlation Between Pertamina Geothermal and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Pertamina Geothermal 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 Pertamina Geothermal and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pertamina Geothermal Energy and Weha Transportasi Indonesia, you can compare the effects of market volatilities on Pertamina Geothermal 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 Pertamina Geothermal with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pertamina Geothermal and Weha Transportasi.
Diversification Opportunities for Pertamina Geothermal and Weha Transportasi
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pertamina and Weha is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Pertamina Geothermal Energy and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and Pertamina Geothermal 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 Pertamina Geothermal Energy 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 Pertamina Geothermal i.e., Pertamina Geothermal and Weha Transportasi go up and down completely randomly.
Pair Corralation between Pertamina Geothermal and Weha Transportasi
Assuming the 90 days trading horizon Pertamina Geothermal Energy is expected to under-perform the Weha Transportasi. But the stock apears to be less risky and, when comparing its historical volatility, Pertamina Geothermal Energy is 1.5 times less risky than Weha Transportasi. The stock trades about -0.15 of its potential returns per unit of risk. The Weha Transportasi Indonesia is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 12,800 in Weha Transportasi Indonesia on September 3, 2024 and sell it today you would lose (500.00) from holding Weha Transportasi Indonesia or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pertamina Geothermal Energy vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Pertamina Geothermal |
| Weha Transportasi |
Pertamina Geothermal and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pertamina Geothermal and Weha Transportasi
The main advantage of trading using opposite Pertamina Geothermal and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pertamina Geothermal 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.| Pertamina Geothermal vs. Chandra Asri Petrochemical | Pertamina Geothermal vs. Bank Negara Indonesia | Pertamina Geothermal vs. Sumber Alfaria Trijaya | Pertamina Geothermal vs. Mitra Pinasthika Mustika |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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