Correlation Between Weha Transportasi and Fast Food
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Fast 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 Fast 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 Fast Food Indonesia, you can compare the effects of market volatilities on Weha Transportasi and Fast 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 Fast Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Fast Food.
Diversification Opportunities for Weha Transportasi and Fast Food
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Weha and Fast is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Fast Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast 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 Fast Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Food Indonesia has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Fast Food go up and down completely randomly.
Pair Corralation between Weha Transportasi and Fast Food
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to generate 0.83 times more return on investment than Fast Food. However, Weha Transportasi Indonesia is 1.21 times less risky than Fast Food. It trades about -0.12 of its potential returns per unit of risk. Fast Food Indonesia is currently generating about -0.3 per unit of risk. If you would invest 14,400 in Weha Transportasi Indonesia on August 28, 2024 and sell it today you would lose (1,500) from holding Weha Transportasi Indonesia or give up 10.42% 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. Fast Food Indonesia
Performance |
| Timeline |
| Weha Transportasi |
| Fast Food Indonesia |
Weha Transportasi and Fast Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Fast Food
The main advantage of trading using opposite Weha Transportasi and Fast Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Fast 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 Fast Food will offset losses from the drop in Fast Food'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 |
| Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Indoritel Makmur Internasional | Fast Food vs. Enseval Putra Megatrading | Fast Food vs. Fks Multi Agro |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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