Correlation Between Hotel Sahid and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Hotel Sahid 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 Hotel Sahid and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Sahid Jaya and Weha Transportasi Indonesia, you can compare the effects of market volatilities on Hotel Sahid 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 Hotel Sahid with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Sahid and Weha Transportasi.
Diversification Opportunities for Hotel Sahid and Weha Transportasi
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hotel and Weha is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Sahid Jaya and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and Hotel Sahid 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 Hotel Sahid Jaya 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 Hotel Sahid i.e., Hotel Sahid and Weha Transportasi go up and down completely randomly.
Pair Corralation between Hotel Sahid and Weha Transportasi
Assuming the 90 days trading horizon Hotel Sahid Jaya is expected to under-perform the Weha Transportasi. In addition to that, Hotel Sahid is 2.04 times more volatile than Weha Transportasi Indonesia. It trades about -0.02 of its total potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about 0.02 per unit of volatility. If you would invest 11,546 in Weha Transportasi Indonesia on August 31, 2024 and sell it today you would earn a total of 754.00 from holding Weha Transportasi Indonesia or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Sahid Jaya vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Hotel Sahid Jaya |
| Weha Transportasi |
Hotel Sahid and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Sahid and Weha Transportasi
The main advantage of trading using opposite Hotel Sahid and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Sahid 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.| Hotel Sahid vs. Japfa Comfeed Indonesia | Hotel Sahid vs. Charoen Pokphand Indonesia | Hotel Sahid vs. Erajaya Swasembada Tbk | Hotel Sahid vs. Indofood Cbp Sukses |
| Weha Transportasi vs. Matahari Department Store | Weha Transportasi vs. Multi Medika Internasional | Weha Transportasi vs. Visi Media Asia | Weha Transportasi vs. Bayan Resources Tbk |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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