Correlation Between Sinar Mas and Wahana Ottomitra
Can any of the company-specific risk be diversified away by investing in both Sinar Mas and Wahana Ottomitra 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 Sinar Mas and Wahana Ottomitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinar Mas Multiartha and Wahana Ottomitra Multiartha, you can compare the effects of market volatilities on Sinar Mas and Wahana Ottomitra 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 Sinar Mas with a short position of Wahana Ottomitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinar Mas and Wahana Ottomitra.
Diversification Opportunities for Sinar Mas and Wahana Ottomitra
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sinar and Wahana is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sinar Mas Multiartha and Wahana Ottomitra Multiartha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Ottomitra Mul and Sinar Mas 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 Sinar Mas Multiartha are associated (or correlated) with Wahana Ottomitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Ottomitra Mul has no effect on the direction of Sinar Mas i.e., Sinar Mas and Wahana Ottomitra go up and down completely randomly.
Pair Corralation between Sinar Mas and Wahana Ottomitra
Assuming the 90 days trading horizon Sinar Mas is expected to generate 1.43 times less return on investment than Wahana Ottomitra. In addition to that, Sinar Mas is 1.24 times more volatile than Wahana Ottomitra Multiartha. It trades about 0.03 of its total potential returns per unit of risk. Wahana Ottomitra Multiartha is currently generating about 0.05 per unit of volatility. If you would invest 26,181 in Wahana Ottomitra Multiartha on December 11, 2024 and sell it today you would earn a total of 10,419 from holding Wahana Ottomitra Multiartha or generate 39.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sinar Mas Multiartha vs. Wahana Ottomitra Multiartha
Performance |
| Timeline |
| Sinar Mas Multiartha |
| Wahana Ottomitra Mul |
Sinar Mas and Wahana Ottomitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinar Mas and Wahana Ottomitra
The main advantage of trading using opposite Sinar Mas and Wahana Ottomitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinar Mas position performs unexpectedly, Wahana Ottomitra 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 Ottomitra will offset losses from the drop in Wahana Ottomitra's long position.| Sinar Mas vs. Bank Mega Tbk | ||
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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