Correlation Between Weha Transportasi and Guna Timur
Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Guna Timur 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 Guna Timur 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 Guna Timur Raya, you can compare the effects of market volatilities on Weha Transportasi and Guna Timur 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 Guna Timur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Guna Timur.
Diversification Opportunities for Weha Transportasi and Guna Timur
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Weha and Guna is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Guna Timur Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guna Timur Raya 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 Guna Timur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guna Timur Raya has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Guna Timur go up and down completely randomly.
Pair Corralation between Weha Transportasi and Guna Timur
Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to under-perform the Guna Timur. In addition to that, Weha Transportasi is 1.02 times more volatile than Guna Timur Raya. It trades about -0.37 of its total potential returns per unit of risk. Guna Timur Raya is currently generating about -0.36 per unit of volatility. If you would invest 11,200 in Guna Timur Raya on August 24, 2024 and sell it today you would lose (2,000) from holding Guna Timur Raya or give up 17.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weha Transportasi Indonesia vs. Guna Timur Raya
Performance |
| Timeline |
| Weha Transportasi |
| Guna Timur Raya |
Weha Transportasi and Guna Timur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weha Transportasi and Guna Timur
The main advantage of trading using opposite Weha Transportasi and Guna Timur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Guna Timur 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 Guna Timur will offset losses from the drop in Guna Timur'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 |
| Guna Timur vs. Sriwahana | Guna Timur vs. PT Trimuda Nuansa | Guna Timur vs. Yelooo Integra Datanet | Guna Timur vs. Transcoal Pacific 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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