Correlation Between Weha Transportasi and Bekasi Fajar
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Bekasi Fajar 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 Weha Transportasi and Bekasi Fajar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weha Transportasi Indonesia and Bekasi Fajar Industrial, you can compare the effects of market volatilities on Weha Transportasi and Bekasi Fajar 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 Weha Transportasi with a short position of Bekasi Fajar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Bekasi Fajar.
Diversification Opportunities for Weha Transportasi and Bekasi Fajar
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Weha and Bekasi is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Bekasi Fajar Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bekasi Fajar Industrial and Weha Transportasi 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 Weha Transportasi Indonesia are associated (or correlated) with Bekasi Fajar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bekasi Fajar Industrial has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Bekasi Fajar go up and down completely randomly.
Pair Corralation between Weha Transportasi and Bekasi Fajar
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to generate 0.91 times more return on investment than Bekasi Fajar. However, Weha Transportasi Indonesia is 1.1 times less risky than Bekasi Fajar. It trades about 0.1 of its potential returns per unit of risk. Bekasi Fajar Industrial is currently generating about 0.01 per unit of risk. If you would invest 10,032 in Weha Transportasi Indonesia on September 3, 2024 and sell it today you would earn a total of 2,468 from holding Weha Transportasi Indonesia or generate 24.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weha Transportasi Indonesia vs. Bekasi Fajar Industrial
Performance |
| Timeline |
| Weha Transportasi |
| Bekasi Fajar Industrial |
Weha Transportasi and Bekasi Fajar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Bekasi Fajar
The main advantage of trading using opposite Weha Transportasi and Bekasi Fajar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Bekasi Fajar 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 Bekasi Fajar will offset losses from the drop in Bekasi Fajar's long position.| Weha Transportasi vs. Intanwijaya Internasional Tbk | Weha Transportasi vs. Champion Pacific Indonesia | Weha Transportasi vs. Mitra Pinasthika Mustika | Weha Transportasi vs. Jakarta Int Hotels |
| Bekasi Fajar vs. Mitra Pinasthika Mustika | Bekasi Fajar vs. Jakarta Int Hotels | Bekasi Fajar vs. Asuransi Harta Aman | Bekasi Fajar vs. Indosterling Technomedia 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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