Correlation Between Wahana Ottomitra and Bank Negara
Can any of the company-specific risk be diversified away by investing in both Wahana Ottomitra and Bank Negara 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 Negara 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 Negara Indonesia, you can compare the effects of market volatilities on Wahana Ottomitra and Bank Negara 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 Negara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wahana Ottomitra and Bank Negara.
Diversification Opportunities for Wahana Ottomitra and Bank Negara
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wahana and Bank is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Ottomitra Multiartha and Bank Negara Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Negara Indonesia 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 Negara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Negara Indonesia has no effect on the direction of Wahana Ottomitra i.e., Wahana Ottomitra and Bank Negara go up and down completely randomly.
Pair Corralation between Wahana Ottomitra and Bank Negara
Assuming the 90 days trading horizon Wahana Ottomitra Multiartha is expected to generate 0.72 times more return on investment than Bank Negara. However, Wahana Ottomitra Multiartha is 1.39 times less risky than Bank Negara. It trades about 0.01 of its potential returns per unit of risk. Bank Negara Indonesia is currently generating about 0.0 per unit of risk. If you would invest 34,963 in Wahana Ottomitra Multiartha on August 24, 2024 and sell it today you would earn a total of 437.00 from holding Wahana Ottomitra Multiartha or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wahana Ottomitra Multiartha vs. Bank Negara Indonesia
Performance |
| Timeline |
| Wahana Ottomitra Mul |
| Bank Negara Indonesia |
Wahana Ottomitra and Bank Negara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wahana Ottomitra and Bank Negara
The main advantage of trading using opposite Wahana Ottomitra and Bank Negara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wahana Ottomitra position performs unexpectedly, Bank Negara 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 Negara will offset losses from the drop in Bank Negara'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 Negara vs. Paninvest Tbk | Bank Negara vs. Maskapai Reasuransi Indonesia | Bank Negara vs. Panin Sekuritas Tbk | Bank Negara 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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