Correlation Between Trias Sentosa and Wahana Ottomitra
Can any of the company-specific risk be diversified away by investing in both Trias Sentosa 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 Trias Sentosa and Wahana Ottomitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trias Sentosa Tbk and Wahana Ottomitra Multiartha, you can compare the effects of market volatilities on Trias Sentosa 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 Trias Sentosa with a short position of Wahana Ottomitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trias Sentosa and Wahana Ottomitra.
Diversification Opportunities for Trias Sentosa and Wahana Ottomitra
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trias and Wahana is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Trias Sentosa Tbk 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 Trias Sentosa 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 Trias Sentosa Tbk 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 Trias Sentosa i.e., Trias Sentosa and Wahana Ottomitra go up and down completely randomly.
Pair Corralation between Trias Sentosa and Wahana Ottomitra
Assuming the 90 days trading horizon Trias Sentosa Tbk is expected to generate 1.89 times more return on investment than Wahana Ottomitra. However, Trias Sentosa is 1.89 times more volatile than Wahana Ottomitra Multiartha. It trades about 0.02 of its potential returns per unit of risk. Wahana Ottomitra Multiartha is currently generating about 0.02 per unit of risk. If you would invest 47,200 in Trias Sentosa Tbk on December 11, 2024 and sell it today you would earn a total of 2,800 from holding Trias Sentosa Tbk or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trias Sentosa Tbk vs. Wahana Ottomitra Multiartha
Performance |
| Timeline |
| Trias Sentosa Tbk |
| Wahana Ottomitra Mul |
Trias Sentosa and Wahana Ottomitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trias Sentosa and Wahana Ottomitra
The main advantage of trading using opposite Trias Sentosa and Wahana Ottomitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trias Sentosa 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.| Trias Sentosa vs. Argha Karya Prima | ||
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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