Correlation Between Weha Transportasi and Diamond Food
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Diamond Food 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 Diamond Food 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 Diamond Food Indonesia, you can compare the effects of market volatilities on Weha Transportasi and Diamond Food 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 Diamond Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Diamond Food.
Diversification Opportunities for Weha Transportasi and Diamond Food
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Weha and Diamond is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Diamond Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Food Indonesia 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 Diamond Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Food Indonesia has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Diamond Food go up and down completely randomly.
Pair Corralation between Weha Transportasi and Diamond Food
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to under-perform the Diamond Food. In addition to that, Weha Transportasi is 1.5 times more volatile than Diamond Food Indonesia. It trades about -0.21 of its total potential returns per unit of risk. Diamond Food Indonesia is currently generating about -0.08 per unit of volatility. If you would invest 79,000 in Diamond Food Indonesia on September 3, 2024 and sell it today you would lose (1,500) from holding Diamond Food Indonesia or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weha Transportasi Indonesia vs. Diamond Food Indonesia
Performance |
| Timeline |
| Weha Transportasi |
| Diamond Food Indonesia |
Weha Transportasi and Diamond Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Diamond Food
The main advantage of trading using opposite Weha Transportasi and Diamond Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Diamond Food 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 Diamond Food will offset losses from the drop in Diamond Food'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 |
| Diamond Food vs. Garudafood Putra Putri | Diamond Food vs. PT Wahana Interfood | Diamond Food vs. Mitra Pinasthika Mustika | Diamond Food vs. Jakarta Int Hotels |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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