Correlation Between Weha Transportasi and Mnc Kapital

Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Mnc Kapital 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 Weha Transportasi and Mnc Kapital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Weha Transportasi Indonesia and Mnc Kapital Indonesia, you can compare the effects of market volatilities on Weha Transportasi and Mnc Kapital 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 Weha Transportasi with a short position of Mnc Kapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Mnc Kapital.

Diversification Opportunities for Weha Transportasi and Mnc Kapital

0.87

Correlation Coefficient

Weha Transportasi  Mnc Kapital

Very poor diversification

The 3 months correlation between Weha and Mnc is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Mnc Kapital Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Kapital Indonesia and Weha Transportasi 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 Weha Transportasi Indonesia are associated (or correlated) with Mnc Kapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Kapital Indonesia has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Mnc Kapital go up and down completely randomly.

Pair Corralation between Weha Transportasi and Mnc Kapital

Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to generate 0.78 times more return on investment than Mnc Kapital. However, Weha Transportasi Indonesia is 1.28 times less risky than Mnc Kapital. It trades about 0.01 of its potential returns per unit of risk. Mnc Kapital Indonesia is currently generating about 0.0 per unit of risk. If you would invest  11,168  in Weha Transportasi Indonesia on October 11, 2024 and sell it today you would lose (368.00) from holding Weha Transportasi Indonesia or give up 3.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.79%
Values	Daily Returns

Weha Transportasi Indonesia  vs.  Mnc Kapital Indonesia

Weha Transportasi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Weha Transportasi Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Mnc Kapital Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mnc Kapital Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Weha Transportasi and Mnc Kapital

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

The idea behind Weha Transportasi Indonesia and Mnc Kapital Indonesia 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.