Correlation Between Tempo Inti and Wahana Pronatural
Can any of the company-specific risk be diversified away by investing in both Tempo Inti and Wahana Pronatural 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 Tempo Inti and Wahana Pronatural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tempo Inti Media and Wahana Pronatural, you can compare the effects of market volatilities on Tempo Inti and Wahana Pronatural 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 Tempo Inti with a short position of Wahana Pronatural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tempo Inti and Wahana Pronatural.
Diversification Opportunities for Tempo Inti and Wahana Pronatural
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tempo and Wahana is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tempo Inti Media and Wahana Pronatural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Pronatural and Tempo Inti 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 Tempo Inti Media are associated (or correlated) with Wahana Pronatural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Pronatural has no effect on the direction of Tempo Inti i.e., Tempo Inti and Wahana Pronatural go up and down completely randomly.
Pair Corralation between Tempo Inti and Wahana Pronatural
Assuming the 90 days trading horizon Tempo Inti is expected to generate 3.65 times less return on investment than Wahana Pronatural. But when comparing it to its historical volatility, Tempo Inti Media is 1.84 times less risky than Wahana Pronatural. It trades about 0.04 of its potential returns per unit of risk. Wahana Pronatural is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 15,400 in Wahana Pronatural on November 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Wahana Pronatural or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tempo Inti Media vs. Wahana Pronatural
Performance |
| Timeline |
| Tempo Inti Media |
| Wahana Pronatural |
Tempo Inti and Wahana Pronatural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tempo Inti and Wahana Pronatural
The main advantage of trading using opposite Tempo Inti and Wahana Pronatural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tempo Inti position performs unexpectedly, Wahana Pronatural 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 Pronatural will offset losses from the drop in Wahana Pronatural's long position.| Tempo Inti vs. Wicaksana Overseas International | Tempo Inti vs. Wahana Pronatural | Tempo Inti vs. Tigaraksa Satria Tbk | Tempo Inti vs. Millennium Pharmacon International |
| Wahana Pronatural vs. Wicaksana Overseas International | Wahana Pronatural vs. Millennium Pharmacon International | Wahana Pronatural vs. Tigaraksa Satria Tbk | Wahana Pronatural vs. Tempo Inti Media |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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