Correlation Between PT Indosat and Wizz Air
Can any of the company-specific risk be diversified away by investing in both PT Indosat and Wizz Air 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 PT Indosat and Wizz Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indosat Tbk and Wizz Air Holdings, you can compare the effects of market volatilities on PT Indosat and Wizz Air 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 PT Indosat with a short position of Wizz Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indosat and Wizz Air.
Diversification Opportunities for PT Indosat and Wizz Air
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between IDO1 and Wizz is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding PT Indosat Tbk and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air Holdings and PT Indosat 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 PT Indosat Tbk are associated (or correlated) with Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of PT Indosat i.e., PT Indosat and Wizz Air go up and down completely randomly.
Pair Corralation between PT Indosat and Wizz Air
Assuming the 90 days trading horizon PT Indosat Tbk is expected to generate 2.87 times more return on investment than Wizz Air. However, PT Indosat is 2.87 times more volatile than Wizz Air Holdings. It trades about 0.1 of its potential returns per unit of risk. Wizz Air Holdings is currently generating about 0.08 per unit of risk. If you would invest 12.00 in PT Indosat Tbk on September 25, 2024 and sell it today you would earn a total of 3.00 from holding PT Indosat Tbk or generate 25.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PT Indosat Tbk vs. Wizz Air Holdings
Performance |
Timeline |
PT Indosat Tbk |
Wizz Air Holdings |
PT Indosat and Wizz Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Indosat and Wizz Air
The main advantage of trading using opposite PT Indosat and Wizz Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indosat position performs unexpectedly, Wizz Air 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 Wizz Air will offset losses from the drop in Wizz Air's long position.PT Indosat vs. Jacquet Metal Service | PT Indosat vs. International Consolidated Airlines | PT Indosat vs. Wizz Air Holdings | PT Indosat vs. Western Copper and |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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