Correlation Between Weha Transportasi and Sentra Food
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Sentra 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 Sentra 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 Sentra Food Indonesia, you can compare the effects of market volatilities on Weha Transportasi and Sentra 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 Sentra Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Sentra Food.
Diversification Opportunities for Weha Transportasi and Sentra Food
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weha and Sentra is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Sentra Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentra 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 Sentra Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentra Food Indonesia has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Sentra Food go up and down completely randomly.
Pair Corralation between Weha Transportasi and Sentra Food
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to generate 0.78 times more return on investment than Sentra Food. However, Weha Transportasi Indonesia is 1.29 times less risky than Sentra Food. It trades about 0.09 of its potential returns per unit of risk. Sentra Food Indonesia is currently generating about 0.0 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weha Transportasi Indonesia vs. Sentra Food Indonesia
Performance |
| Timeline |
| Weha Transportasi |
| Sentra Food Indonesia |
Weha Transportasi and Sentra Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Sentra Food
The main advantage of trading using opposite Weha Transportasi and Sentra Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Sentra 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 Sentra Food will offset losses from the drop in Sentra 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 |
| Sentra Food vs. Garudafood Putra Putri | Sentra Food vs. Estika Tata Tiara | Sentra Food vs. Campina Ice Cream | Sentra Food vs. PT Wahana Interfood |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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