Correlation Between Weha Transportasi and Mark Dynamics
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Mark Dynamics 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 Mark Dynamics 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 Mark Dynamics Indonesia, you can compare the effects of market volatilities on Weha Transportasi and Mark Dynamics 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 Mark Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Mark Dynamics.
Diversification Opportunities for Weha Transportasi and Mark Dynamics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Weha and Mark is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Mark Dynamics Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mark Dynamics 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 Mark Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mark Dynamics Indonesia has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Mark Dynamics go up and down completely randomly.
Pair Corralation between Weha Transportasi and Mark Dynamics
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to under-perform the Mark Dynamics. In addition to that, Weha Transportasi is 1.01 times more volatile than Mark Dynamics Indonesia. It trades about -0.36 of its total potential returns per unit of risk. Mark Dynamics Indonesia is currently generating about -0.1 per unit of volatility. If you would invest 108,896 in Mark Dynamics Indonesia on August 25, 2024 and sell it today you would lose (5,896) from holding Mark Dynamics Indonesia or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weha Transportasi Indonesia vs. Mark Dynamics Indonesia
Performance |
| Timeline |
| Weha Transportasi |
| Mark Dynamics Indonesia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Weha Transportasi and Mark Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Mark Dynamics
The main advantage of trading using opposite Weha Transportasi and Mark Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Mark Dynamics 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 Mark Dynamics will offset losses from the drop in Mark Dynamics' long position.| Weha Transportasi vs. PT Temas Tbk | Weha Transportasi vs. Rig Tenders Tbk | Weha Transportasi vs. Samudera Indonesia Tbk |
| Mark Dynamics vs. Prodia Widyahusada Tbk | Mark Dynamics vs. Medikaloka Hermina PT | Mark Dynamics vs. Arwana Citramulia Tbk | Mark Dynamics vs. Integra Indocabinet 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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