Correlation Between Bank Woori and Centratama Telekomunikasi
Can any of the company-specific risk be diversified away by investing in both Bank Woori and Centratama Telekomunikasi 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 Bank Woori and Centratama Telekomunikasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Woori Saudara and Centratama Telekomunikasi Ind, you can compare the effects of market volatilities on Bank Woori and Centratama Telekomunikasi 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 Bank Woori with a short position of Centratama Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Woori and Centratama Telekomunikasi.
Diversification Opportunities for Bank Woori and Centratama Telekomunikasi
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Centratama is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank Woori Saudara and Centratama Telekomunikasi Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centratama Telekomunikasi and Bank Woori 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 Bank Woori Saudara are associated (or correlated) with Centratama Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centratama Telekomunikasi has no effect on the direction of Bank Woori i.e., Bank Woori and Centratama Telekomunikasi go up and down completely randomly.
Pair Corralation between Bank Woori and Centratama Telekomunikasi
Assuming the 90 days trading horizon Bank Woori Saudara is expected to under-perform the Centratama Telekomunikasi. But the stock apears to be less risky and, when comparing its historical volatility, Bank Woori Saudara is 1.8 times less risky than Centratama Telekomunikasi. The stock trades about -0.22 of its potential returns per unit of risk. The Centratama Telekomunikasi Ind is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4,600 in Centratama Telekomunikasi Ind on November 3, 2024 and sell it today you would lose (100.00) from holding Centratama Telekomunikasi Ind or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Woori Saudara vs. Centratama Telekomunikasi Ind
Performance |
| Timeline |
| Bank Woori Saudara |
| Centratama Telekomunikasi |
Bank Woori and Centratama Telekomunikasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Woori and Centratama Telekomunikasi
The main advantage of trading using opposite Bank Woori and Centratama Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Woori position performs unexpectedly, Centratama Telekomunikasi 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 Centratama Telekomunikasi will offset losses from the drop in Centratama Telekomunikasi's long position.| Bank Woori vs. Bank Ocbc Nisp | Bank Woori vs. Bank Pan Indonesia | Bank Woori vs. Bank Mega Tbk | Bank Woori vs. Bank Mayapada Internasional |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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