Correlation Between Weha Transportasi and Hexindo Adiperkasa
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Hexindo Adiperkasa 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 Hexindo Adiperkasa 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 Hexindo Adiperkasa Tbk, you can compare the effects of market volatilities on Weha Transportasi and Hexindo Adiperkasa 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 Hexindo Adiperkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Hexindo Adiperkasa.
Diversification Opportunities for Weha Transportasi and Hexindo Adiperkasa
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weha and Hexindo is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Hexindo Adiperkasa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexindo Adiperkasa Tbk 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 Hexindo Adiperkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexindo Adiperkasa Tbk has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Hexindo Adiperkasa go up and down completely randomly.
Pair Corralation between Weha Transportasi and Hexindo Adiperkasa
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to generate 2.26 times more return on investment than Hexindo Adiperkasa. However, Weha Transportasi is 2.26 times more volatile than Hexindo Adiperkasa Tbk. It trades about 0.03 of its potential returns per unit of risk. Hexindo Adiperkasa Tbk is currently generating about 0.01 per unit of risk. If you would invest 10,884 in Weha Transportasi Indonesia on August 26, 2024 and sell it today you would earn a total of 2,316 from holding Weha Transportasi Indonesia or generate 21.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Weha Transportasi Indonesia vs. Hexindo Adiperkasa Tbk
Performance |
| Timeline |
| Weha Transportasi |
| Hexindo Adiperkasa Tbk |
Weha Transportasi and Hexindo Adiperkasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Hexindo Adiperkasa
The main advantage of trading using opposite Weha Transportasi and Hexindo Adiperkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Hexindo Adiperkasa 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 Hexindo Adiperkasa will offset losses from the drop in Hexindo Adiperkasa'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 |
| Hexindo Adiperkasa vs. Rukun Raharja Tbk | Hexindo Adiperkasa vs. PT Temas Tbk | Hexindo Adiperkasa vs. Weha Transportasi 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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