Correlation Between Wahana Ottomitra and Bank Central
Can any of the company-specific risk be diversified away by investing in both Wahana Ottomitra and Bank Central 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 Wahana Ottomitra and Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wahana Ottomitra Multiartha and Bank Central Asia, you can compare the effects of market volatilities on Wahana Ottomitra and Bank Central 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 Wahana Ottomitra with a short position of Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wahana Ottomitra and Bank Central.
Diversification Opportunities for Wahana Ottomitra and Bank Central
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wahana and Bank is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Ottomitra Multiartha and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia and Wahana Ottomitra 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 Wahana Ottomitra Multiartha are associated (or correlated) with Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Wahana Ottomitra i.e., Wahana Ottomitra and Bank Central go up and down completely randomly.
Pair Corralation between Wahana Ottomitra and Bank Central
Assuming the 90 days trading horizon Wahana Ottomitra Multiartha is expected to under-perform the Bank Central. But the stock apears to be less risky and, when comparing its historical volatility, Wahana Ottomitra Multiartha is 1.25 times less risky than Bank Central. The stock trades about -0.05 of its potential returns per unit of risk. The Bank Central Asia is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 925,385 in Bank Central Asia on August 25, 2024 and sell it today you would earn a total of 59,615 from holding Bank Central Asia or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Wahana Ottomitra Multiartha vs. Bank Central Asia
Performance |
| Timeline |
| Wahana Ottomitra Mul |
| Bank Central Asia |
Wahana Ottomitra and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wahana Ottomitra and Bank Central
The main advantage of trading using opposite Wahana Ottomitra and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wahana Ottomitra position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central's long position.| Wahana Ottomitra vs. Paninvest Tbk | Wahana Ottomitra vs. Maskapai Reasuransi Indonesia | Wahana Ottomitra vs. Panin Sekuritas Tbk | Wahana Ottomitra vs. Lenox Pasifik Investama |
| Bank Central vs. Paninvest Tbk | Bank Central vs. Maskapai Reasuransi Indonesia | Bank Central vs. Panin Sekuritas Tbk | Bank Central vs. Wahana Ottomitra Multiartha |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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