Correlation Between Habco Trans and Wir Asia

Can any of the company-specific risk be diversified away by investing in both Habco Trans and Wir Asia 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 Habco Trans and Wir Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Habco Trans Maritima and Wir Asia Tbk, you can compare the effects of market volatilities on Habco Trans and Wir Asia 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 Habco Trans with a short position of Wir Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habco Trans and Wir Asia.

Diversification Opportunities for Habco Trans and Wir Asia

-0.35

Correlation Coefficient

Habco Trans  Wir Asia

Very good diversification

The 3 months correlation between Habco and Wir is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Habco Trans Maritima and Wir Asia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wir Asia Tbk and Habco Trans 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 Habco Trans Maritima are associated (or correlated) with Wir Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wir Asia Tbk has no effect on the direction of Habco Trans i.e., Habco Trans and Wir Asia go up and down completely randomly.

Pair Corralation between Habco Trans and Wir Asia

Assuming the 90 days trading horizon Habco Trans Maritima is expected to under-perform the Wir Asia. But the stock apears to be less risky and, when comparing its historical volatility, Habco Trans Maritima is 2.19 times less risky than Wir Asia. The stock trades about -0.04 of its potential returns per unit of risk. The Wir Asia Tbk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8,100  in Wir Asia Tbk on December 26, 2024 and sell it today you would earn a total of  400.00  from holding Wir Asia Tbk or generate 4.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Habco Trans Maritima  vs.  Wir Asia Tbk

Habco Trans Maritima

Risk-Adjusted Performance

Very Weak

Over the last 90 days Habco Trans Maritima has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Wir Asia Tbk

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wir Asia Tbk are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Wir Asia disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Habco Trans and Wir Asia

The main advantage of trading using opposite Habco Trans and Wir Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Habco Trans position performs unexpectedly, Wir Asia 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 Wir Asia will offset losses from the drop in Wir Asia's long position.

The idea behind Habco Trans Maritima and Wir Asia Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.