Correlation Between Weha Transportasi and Matahari Department
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Matahari Department 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 Matahari Department 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 Matahari Department Store, you can compare the effects of market volatilities on Weha Transportasi and Matahari Department 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 Matahari Department. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Matahari Department.
Diversification Opportunities for Weha Transportasi and Matahari Department
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Weha and Matahari is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Matahari Department Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matahari Department Store 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 Matahari Department. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matahari Department Store has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Matahari Department go up and down completely randomly.
Pair Corralation between Weha Transportasi and Matahari Department
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to under-perform the Matahari Department. In addition to that, Weha Transportasi is 1.72 times more volatile than Matahari Department Store. It trades about -0.33 of its total potential returns per unit of risk. Matahari Department Store is currently generating about -0.36 per unit of volatility. If you would invest 156,500 in Matahari Department Store on August 31, 2024 and sell it today you would lose (16,000) from holding Matahari Department Store or give up 10.22% 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. Matahari Department Store
Performance |
| Timeline |
| Weha Transportasi |
| Matahari Department Store |
Weha Transportasi and Matahari Department Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Matahari Department
The main advantage of trading using opposite Weha Transportasi and Matahari Department positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Matahari Department 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 Matahari Department will offset losses from the drop in Matahari Department's long position.| Weha Transportasi vs. Matahari Department Store | Weha Transportasi vs. Multi Medika Internasional | Weha Transportasi vs. Visi Media Asia | Weha Transportasi vs. Bayan Resources Tbk |
| Matahari Department vs. Surya Citra Media | Matahari Department vs. Akr Corporindo Tbk | Matahari Department vs. Media Nusantara Citra | Matahari Department vs. Pembangunan Perumahan PT |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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