Correlation Between Wahana Ottomitra and Tifa Finance
Can any of the company-specific risk be diversified away by investing in both Wahana Ottomitra and Tifa Finance 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 Tifa Finance 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 Tifa Finance Tbk, you can compare the effects of market volatilities on Wahana Ottomitra and Tifa Finance 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 Tifa Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wahana Ottomitra and Tifa Finance.
Diversification Opportunities for Wahana Ottomitra and Tifa Finance
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wahana and Tifa is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Ottomitra Multiartha and Tifa Finance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tifa Finance Tbk 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 Tifa Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tifa Finance Tbk has no effect on the direction of Wahana Ottomitra i.e., Wahana Ottomitra and Tifa Finance go up and down completely randomly.
Pair Corralation between Wahana Ottomitra and Tifa Finance
Assuming the 90 days trading horizon Wahana Ottomitra Multiartha is expected to generate 3.11 times more return on investment than Tifa Finance. However, Wahana Ottomitra is 3.11 times more volatile than Tifa Finance Tbk. It trades about 0.06 of its potential returns per unit of risk. Tifa Finance Tbk is currently generating about -0.41 per unit of risk. If you would invest 35,400 in Wahana Ottomitra Multiartha on September 4, 2024 and sell it today you would earn a total of 400.00 from holding Wahana Ottomitra Multiartha or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wahana Ottomitra Multiartha vs. Tifa Finance Tbk
Performance |
| Timeline |
| Wahana Ottomitra Mul |
| Tifa Finance Tbk |
Wahana Ottomitra and Tifa Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wahana Ottomitra and Tifa Finance
The main advantage of trading using opposite Wahana Ottomitra and Tifa Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wahana Ottomitra position performs unexpectedly, Tifa Finance 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 Tifa Finance will offset losses from the drop in Tifa Finance's long position.| Wahana Ottomitra vs. Paninvest Tbk | Wahana Ottomitra vs. Mitra Pinasthika Mustika | Wahana Ottomitra vs. Jakarta Int Hotels | Wahana Ottomitra vs. Asuransi Harta Aman |
| Tifa Finance vs. Paninvest Tbk | Tifa Finance vs. Mitra Pinasthika Mustika | Tifa Finance vs. Jakarta Int Hotels | Tifa Finance vs. Asuransi Harta Aman |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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