Correlation Between Weha Transportasi and Capital Financial
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Capital Financial 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 Capital Financial 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 Capital Financial Indonesia, you can compare the effects of market volatilities on Weha Transportasi and Capital Financial 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 Capital Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Capital Financial.
Diversification Opportunities for Weha Transportasi and Capital Financial
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weha and Capital is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Capital Financial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Financial 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 Capital Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Financial has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Capital Financial go up and down completely randomly.
Pair Corralation between Weha Transportasi and Capital Financial
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to generate 1.13 times more return on investment than Capital Financial. However, Weha Transportasi is 1.13 times more volatile than Capital Financial Indonesia. It trades about 0.02 of its potential returns per unit of risk. Capital Financial Indonesia is currently generating about -0.02 per unit of risk. If you would invest 10,600 in Weha Transportasi Indonesia on September 12, 2024 and sell it today you would earn a total of 1,600 from holding Weha Transportasi Indonesia or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weha Transportasi Indonesia vs. Capital Financial Indonesia
Performance |
| Timeline |
| Weha Transportasi |
| Capital Financial |
Weha Transportasi and Capital Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Capital Financial
The main advantage of trading using opposite Weha Transportasi and Capital Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Capital Financial 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 Capital Financial will offset losses from the drop in Capital Financial's long position.| Weha Transportasi vs. PT Temas Tbk | Weha Transportasi vs. Dosni Roha Indonesia | Weha Transportasi vs. Rig Tenders Tbk | Weha Transportasi vs. Samudera Indonesia Tbk |
| Capital Financial vs. Pacific Strategic Financial | Capital Financial vs. Bk Harda Internasional | Capital Financial vs. Indoritel Makmur Internasional | Capital Financial vs. Bank Sinarmas 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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