Correlation Between Weha Transportasi and Indosterling Technomedia
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Indosterling Technomedia 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 Indosterling Technomedia 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 Indosterling Technomedia Tbk, you can compare the effects of market volatilities on Weha Transportasi and Indosterling Technomedia 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 Indosterling Technomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Indosterling Technomedia.
Diversification Opportunities for Weha Transportasi and Indosterling Technomedia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Weha and Indosterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Indosterling Technomedia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosterling Technomedia 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 Indosterling Technomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosterling Technomedia has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Indosterling Technomedia go up and down completely randomly.
Pair Corralation between Weha Transportasi and Indosterling Technomedia
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to generate 1.04 times more return on investment than Indosterling Technomedia. However, Weha Transportasi is 1.04 times more volatile than Indosterling Technomedia Tbk. It trades about 0.02 of its potential returns per unit of risk. Indosterling Technomedia Tbk is currently generating about -0.34 per unit of risk. If you would invest 10,600 in Weha Transportasi Indonesia on September 12, 2024 and sell it today you would earn a total of 1,600 from holding Weha Transportasi Indonesia or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Weha Transportasi Indonesia vs. Indosterling Technomedia Tbk
Performance |
| Timeline |
| Weha Transportasi |
| Indosterling Technomedia |
Weha Transportasi and Indosterling Technomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Indosterling Technomedia
The main advantage of trading using opposite Weha Transportasi and Indosterling Technomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Indosterling Technomedia 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 Indosterling Technomedia will offset losses from the drop in Indosterling Technomedia'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 |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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