Correlation Between Palma Serasih and Wahana Inti
Can any of the company-specific risk be diversified away by investing in both Palma Serasih and Wahana Inti 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 Palma Serasih and Wahana Inti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palma Serasih PT and Wahana Inti MakmurTbk, you can compare the effects of market volatilities on Palma Serasih and Wahana Inti 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 Palma Serasih with a short position of Wahana Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palma Serasih and Wahana Inti.
Diversification Opportunities for Palma Serasih and Wahana Inti
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Palma and Wahana is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Palma Serasih PT and Wahana Inti MakmurTbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Inti MakmurTbk and Palma Serasih 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 Palma Serasih PT are associated (or correlated) with Wahana Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Inti MakmurTbk has no effect on the direction of Palma Serasih i.e., Palma Serasih and Wahana Inti go up and down completely randomly.
Pair Corralation between Palma Serasih and Wahana Inti
Assuming the 90 days trading horizon Palma Serasih PT is expected to generate 0.43 times more return on investment than Wahana Inti. However, Palma Serasih PT is 2.32 times less risky than Wahana Inti. It trades about 0.05 of its potential returns per unit of risk. Wahana Inti MakmurTbk is currently generating about 0.01 per unit of risk. If you would invest 12,600 in Palma Serasih PT on December 2, 2024 and sell it today you would earn a total of 4,700 from holding Palma Serasih PT or generate 37.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palma Serasih PT vs. Wahana Inti MakmurTbk
Performance |
| Timeline |
| Palma Serasih PT |
| Wahana Inti MakmurTbk |
Palma Serasih and Wahana Inti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palma Serasih and Wahana Inti
The main advantage of trading using opposite Palma Serasih and Wahana Inti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palma Serasih position performs unexpectedly, Wahana Inti 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 Wahana Inti will offset losses from the drop in Wahana Inti's long position.| Palma Serasih vs. Indo Pureco Pratama | Palma Serasih vs. Jaya Swarasa Agung | Palma Serasih vs. Cisarua Mountain Dairy | Palma Serasih vs. Pratama Abadi Nusa |
| Wahana Inti vs. Indo Pureco Pratama | Wahana Inti vs. Jaya Swarasa Agung | Wahana Inti vs. Cisarua Mountain Dairy | Wahana Inti vs. Pratama Abadi Nusa |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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