Correlation Between Wahana Ottomitra and Bank Maybank

Can any of the company-specific risk be diversified away by investing in both Wahana Ottomitra and Bank Maybank 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 Bank Maybank 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 Bank Maybank Indonesia, you can compare the effects of market volatilities on Wahana Ottomitra and Bank Maybank 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 Bank Maybank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wahana Ottomitra and Bank Maybank.

Diversification Opportunities for Wahana Ottomitra and Bank Maybank

-0.29

Correlation Coefficient

Wahana Ottomitra  Bank Maybank

Very good diversification

The 3 months correlation between Wahana and Bank is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Ottomitra Multiartha and Bank Maybank Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Maybank Indonesia 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 Bank Maybank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Maybank Indonesia has no effect on the direction of Wahana Ottomitra i.e., Wahana Ottomitra and Bank Maybank go up and down completely randomly.

Pair Corralation between Wahana Ottomitra and Bank Maybank

Assuming the 90 days trading horizon Wahana Ottomitra Multiartha is expected to generate 1.46 times more return on investment than Bank Maybank. However, Wahana Ottomitra is 1.46 times more volatile than Bank Maybank Indonesia. It trades about 0.04 of its potential returns per unit of risk. Bank Maybank Indonesia is currently generating about -0.13 per unit of risk. If you would invest  35,200  in Wahana Ottomitra Multiartha on December 29, 2024 and sell it today you would earn a total of  1,200  from holding Wahana Ottomitra Multiartha or generate 3.41% return on investment over 90 days.

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

Wahana Ottomitra Multiartha  vs.  Bank Maybank Indonesia

Wahana Ottomitra Mul

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wahana Ottomitra Multiartha are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Wahana Ottomitra is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bank Maybank Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Maybank Indonesia 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.

Pair Trading with Wahana Ottomitra and Bank Maybank

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

The idea behind Wahana Ottomitra Multiartha and Bank Maybank 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.