Correlation Between Wahana Ottomitra and Bank Victoria

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

Diversification Opportunities for Wahana Ottomitra and Bank Victoria

-0.04

Correlation Coefficient

Wahana Ottomitra  Bank Victoria

Good diversification

The 3 months correlation between Wahana and Bank is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Ottomitra Multiartha and Bank Victoria International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Victoria Intern 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 Victoria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Victoria Intern has no effect on the direction of Wahana Ottomitra i.e., Wahana Ottomitra and Bank Victoria go up and down completely randomly.

Pair Corralation between Wahana Ottomitra and Bank Victoria

Assuming the 90 days trading horizon Wahana Ottomitra Multiartha is expected to under-perform the Bank Victoria. But the stock apears to be less risky and, when comparing its historical volatility, Wahana Ottomitra Multiartha is 3.01 times less risky than Bank Victoria. The stock trades about -0.02 of its potential returns per unit of risk. The Bank Victoria International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  7,100  in Bank Victoria International on September 29, 2024 and sell it today you would earn a total of  1,800  from holding Bank Victoria International or generate 25.35% 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 Victoria International

Wahana Ottomitra Mul

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wahana Ottomitra Multiartha has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Victoria Intern

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Victoria International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Bank Victoria may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Wahana Ottomitra and Bank Victoria

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

The idea behind Wahana Ottomitra Multiartha and Bank Victoria International 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.