Correlation Between Sriwahana and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Sriwahana 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 Sriwahana and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sriwahana and Weha Transportasi Indonesia, you can compare the effects of market volatilities on Sriwahana 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 Sriwahana with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sriwahana and Weha Transportasi.
Diversification Opportunities for Sriwahana and Weha Transportasi
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sriwahana and Weha is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sriwahana and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and Sriwahana 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 Sriwahana 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 Sriwahana i.e., Sriwahana and Weha Transportasi go up and down completely randomly.
Pair Corralation between Sriwahana and Weha Transportasi
Assuming the 90 days trading horizon Sriwahana is expected to generate 2.89 times more return on investment than Weha Transportasi. However, Sriwahana is 2.89 times more volatile than Weha Transportasi Indonesia. It trades about 0.24 of its potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about 0.06 per unit of risk. If you would invest 1,200 in Sriwahana on August 28, 2024 and sell it today you would earn a total of 1,400 from holding Sriwahana or generate 116.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sriwahana vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| Sriwahana |
| Weha Transportasi |
Sriwahana and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sriwahana and Weha Transportasi
The main advantage of trading using opposite Sriwahana and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sriwahana 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.| Sriwahana vs. Lotte Chemical Titan | Sriwahana vs. Agro Yasa Lestari | Sriwahana vs. Era Mandiri Cemerlang | Sriwahana vs. Jasnita Telekomindo 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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