Correlation Between Weha Transportasi and PT Wahana
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and PT Wahana 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 PT Wahana 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 PT Wahana Interfood, you can compare the effects of market volatilities on Weha Transportasi and PT Wahana 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 PT Wahana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and PT Wahana.
Diversification Opportunities for Weha Transportasi and PT Wahana
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Weha and COCO is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and PT Wahana Interfood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Wahana Interfood 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 PT Wahana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Wahana Interfood has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and PT Wahana go up and down completely randomly.
Pair Corralation between Weha Transportasi and PT Wahana
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to generate 0.48 times more return on investment than PT Wahana. However, Weha Transportasi Indonesia is 2.07 times less risky than PT Wahana. It trades about 0.09 of its potential returns per unit of risk. PT Wahana Interfood is currently generating about -0.08 per unit of risk. If you would invest 9,938 in Weha Transportasi Indonesia on September 1, 2024 and sell it today you would earn a total of 2,362 from holding Weha Transportasi Indonesia or generate 23.77% 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. PT Wahana Interfood
Performance |
| Timeline |
| Weha Transportasi |
| PT Wahana Interfood |
Weha Transportasi and PT Wahana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and PT Wahana
The main advantage of trading using opposite Weha Transportasi and PT Wahana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, PT Wahana 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 PT Wahana will offset losses from the drop in PT Wahana'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 |
| PT Wahana vs. Garudafood Putra Putri | PT Wahana vs. Sentra Food Indonesia | PT Wahana vs. Campina Ice Cream | PT Wahana vs. Diamond Food Indonesia |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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