Correlation Between Wahana Ottomitra and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both Wahana Ottomitra and Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa Tbk, you can compare the effects of market volatilities on Wahana Ottomitra and Trias Sentosa 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 Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wahana Ottomitra and Trias Sentosa.
Diversification Opportunities for Wahana Ottomitra and Trias Sentosa
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wahana and Trias is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Ottomitra Multiartha and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa 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 Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Wahana Ottomitra i.e., Wahana Ottomitra and Trias Sentosa go up and down completely randomly.
Pair Corralation between Wahana Ottomitra and Trias Sentosa
Assuming the 90 days trading horizon Wahana Ottomitra Multiartha is expected to generate 0.65 times more return on investment than Trias Sentosa. However, Wahana Ottomitra Multiartha is 1.54 times less risky than Trias Sentosa. It trades about 0.05 of its potential returns per unit of risk. Trias Sentosa Tbk is currently generating about -0.01 per unit of risk. If you would invest 26,181 in Wahana Ottomitra Multiartha on December 11, 2024 and sell it today you would earn a total of 10,419 from holding Wahana Ottomitra Multiartha or generate 39.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.14% |
| Values | Daily Returns |
Wahana Ottomitra Multiartha vs. Trias Sentosa Tbk
Performance |
| Timeline |
| Wahana Ottomitra Mul |
| Trias Sentosa Tbk |
Wahana Ottomitra and Trias Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wahana Ottomitra and Trias Sentosa
The main advantage of trading using opposite Wahana Ottomitra and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wahana Ottomitra position performs unexpectedly, Trias Sentosa 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 Trias Sentosa will offset losses from the drop in Trias Sentosa's long position.| Wahana Ottomitra vs. Trimegah Securities Tbk | ||
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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