Correlation Between Bank Woori and Hotel Sahid
Can any of the company-specific risk be diversified away by investing in both Bank Woori and Hotel Sahid 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 Hotel Sahid 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 Hotel Sahid Jaya, you can compare the effects of market volatilities on Bank Woori and Hotel Sahid 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 Hotel Sahid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Woori and Hotel Sahid.
Diversification Opportunities for Bank Woori and Hotel Sahid
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Hotel is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank Woori Saudara and Hotel Sahid Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Sahid Jaya 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 Hotel Sahid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Sahid Jaya has no effect on the direction of Bank Woori i.e., Bank Woori and Hotel Sahid go up and down completely randomly.
Pair Corralation between Bank Woori and Hotel Sahid
Assuming the 90 days trading horizon Bank Woori Saudara is expected to generate 0.23 times more return on investment than Hotel Sahid. However, Bank Woori Saudara is 4.29 times less risky than Hotel Sahid. It trades about -0.05 of its potential returns per unit of risk. Hotel Sahid Jaya is currently generating about -0.03 per unit of risk. If you would invest 53,689 in Bank Woori Saudara on November 2, 2024 and sell it today you would lose (14,889) from holding Bank Woori Saudara or give up 27.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Woori Saudara vs. Hotel Sahid Jaya
Performance |
| Timeline |
| Bank Woori Saudara |
| Hotel Sahid Jaya |
Bank Woori and Hotel Sahid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Woori and Hotel Sahid
The main advantage of trading using opposite Bank Woori and Hotel Sahid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Woori position performs unexpectedly, Hotel Sahid 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 Hotel Sahid will offset losses from the drop in Hotel Sahid'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 |
| Hotel Sahid vs. Pembangunan Jaya Ancol | Hotel Sahid vs. Panorama Sentrawisata Tbk | Hotel Sahid vs. Sona Topas Tourism | Hotel Sahid vs. Millennium Pharmacon International |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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