Correlation Between Weha Transportasi and Energi Mega
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Energi Mega 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 Energi Mega 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 Energi Mega Persada, you can compare the effects of market volatilities on Weha Transportasi and Energi Mega 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 Energi Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Energi Mega.
Diversification Opportunities for Weha Transportasi and Energi Mega
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weha and Energi is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Energi Mega Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energi Mega Persada 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 Energi Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energi Mega Persada has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Energi Mega go up and down completely randomly.
Pair Corralation between Weha Transportasi and Energi Mega
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to under-perform the Energi Mega. But the stock apears to be less risky and, when comparing its historical volatility, Weha Transportasi Indonesia is 2.09 times less risky than Energi Mega. The stock trades about 0.0 of its potential returns per unit of risk. The Energi Mega Persada is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 20,000 in Energi Mega Persada on September 2, 2024 and sell it today you would earn a total of 4,200 from holding Energi Mega Persada or generate 21.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weha Transportasi Indonesia vs. Energi Mega Persada
Performance |
| Timeline |
| Weha Transportasi |
| Energi Mega Persada |
Weha Transportasi and Energi Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Energi Mega
The main advantage of trading using opposite Weha Transportasi and Energi Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Energi Mega 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 Energi Mega will offset losses from the drop in Energi Mega'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 |
| Energi Mega vs. Mitrabahtera Segara Sejati | Energi Mega vs. Weha Transportasi Indonesia | Energi Mega vs. Rig Tenders 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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