Correlation Between Weha Transportasi and PT Trimuda
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and PT Trimuda 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 PT Trimuda 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 PT Trimuda Nuansa, you can compare the effects of market volatilities on Weha Transportasi and PT Trimuda 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 PT Trimuda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and PT Trimuda.
Diversification Opportunities for Weha Transportasi and PT Trimuda
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Weha and TNCA is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and PT Trimuda Nuansa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Trimuda Nuansa 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 PT Trimuda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Trimuda Nuansa has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and PT Trimuda go up and down completely randomly.
Pair Corralation between Weha Transportasi and PT Trimuda
Assuming the 90 days trading horizon Weha Transportasi is expected to generate 1.88 times less return on investment than PT Trimuda. But when comparing it to its historical volatility, Weha Transportasi Indonesia is 2.09 times less risky than PT Trimuda. It trades about 0.03 of its potential returns per unit of risk. PT Trimuda Nuansa is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 19,700 in PT Trimuda Nuansa on August 24, 2024 and sell it today you would earn a total of 700.00 from holding PT Trimuda Nuansa or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weha Transportasi Indonesia vs. PT Trimuda Nuansa
Performance |
| Timeline |
| Weha Transportasi |
| PT Trimuda Nuansa |
Weha Transportasi and PT Trimuda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and PT Trimuda
The main advantage of trading using opposite Weha Transportasi and PT Trimuda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, PT Trimuda 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 PT Trimuda will offset losses from the drop in PT Trimuda'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 |
| PT Trimuda vs. Guna Timur Raya | PT Trimuda vs. Satria Antaran Prima | PT Trimuda vs. Transcoal Pacific Tbk | PT Trimuda vs. Pelayaran Nelly Dwi |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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