Correlation Between PT Trimuda and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both PT Trimuda 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 PT Trimuda and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Trimuda Nuansa and Weha Transportasi Indonesia, you can compare the effects of market volatilities on PT Trimuda 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 PT Trimuda with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Trimuda and Weha Transportasi.
Diversification Opportunities for PT Trimuda and Weha Transportasi
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between TNCA and Weha is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PT Trimuda Nuansa and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and PT Trimuda 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 PT Trimuda Nuansa 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 PT Trimuda i.e., PT Trimuda and Weha Transportasi go up and down completely randomly.
Pair Corralation between PT Trimuda and Weha Transportasi
Assuming the 90 days trading horizon PT Trimuda Nuansa is expected to under-perform the Weha Transportasi. In addition to that, PT Trimuda is 2.67 times more volatile than Weha Transportasi Indonesia. It trades about -0.28 of its total potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about -0.38 per unit of volatility. If you would invest 15,900 in Weha Transportasi Indonesia on August 28, 2024 and sell it today you would lose (3,000) from holding Weha Transportasi Indonesia or give up 18.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Trimuda Nuansa vs. Weha Transportasi Indonesia
Performance |
| Timeline |
| PT Trimuda Nuansa |
| Weha Transportasi |
PT Trimuda and Weha Transportasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Trimuda and Weha Transportasi
The main advantage of trading using opposite PT Trimuda and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Trimuda 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.| PT Trimuda vs. Guna Timur Raya | PT Trimuda vs. Transcoal Pacific Tbk | PT Trimuda vs. Pelayaran Nelly Dwi | PT Trimuda vs. Yelooo Integra Datanet |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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