Correlation Between Wahana Ottomitra and Sinar Mas
Can any of the company-specific risk be diversified away by investing in both Wahana Ottomitra and Sinar Mas 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 Sinar Mas 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 Sinar Mas Multiartha, you can compare the effects of market volatilities on Wahana Ottomitra and Sinar Mas 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 Sinar Mas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wahana Ottomitra and Sinar Mas.
Diversification Opportunities for Wahana Ottomitra and Sinar Mas
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wahana and Sinar is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Ottomitra Multiartha and Sinar Mas Multiartha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinar Mas Multiartha 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 Sinar Mas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinar Mas Multiartha has no effect on the direction of Wahana Ottomitra i.e., Wahana Ottomitra and Sinar Mas go up and down completely randomly.
Pair Corralation between Wahana Ottomitra and Sinar Mas
Assuming the 90 days trading horizon Wahana Ottomitra is expected to generate 1.48 times less return on investment than Sinar Mas. But when comparing it to its historical volatility, Wahana Ottomitra Multiartha is 1.59 times less risky than Sinar Mas. It trades about 0.02 of its potential returns per unit of risk. Sinar Mas Multiartha is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,450,000 in Sinar Mas Multiartha on December 11, 2024 and sell it today you would earn a total of 72,500 from holding Sinar Mas Multiartha or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wahana Ottomitra Multiartha vs. Sinar Mas Multiartha
Performance |
| Timeline |
| Wahana Ottomitra Mul |
| Sinar Mas Multiartha |
Wahana Ottomitra and Sinar Mas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wahana Ottomitra and Sinar Mas
The main advantage of trading using opposite Wahana Ottomitra and Sinar Mas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wahana Ottomitra position performs unexpectedly, Sinar Mas 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 Sinar Mas will offset losses from the drop in Sinar Mas' long position.| Wahana Ottomitra vs. Trimegah Securities Tbk | ||
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| Sinar Mas vs. Sinar Mas Agro |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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