Correlation Between Wahana Ottomitra and Lippo General

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

Diversification Opportunities for Wahana Ottomitra and Lippo General

0.34

Correlation Coefficient

Wahana Ottomitra  Lippo General

Weak diversification

The 3 months correlation between Wahana and Lippo is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Ottomitra Multiartha and Lippo General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lippo General Insurance 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 Lippo General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lippo General Insurance has no effect on the direction of Wahana Ottomitra i.e., Wahana Ottomitra and Lippo General go up and down completely randomly.

Pair Corralation between Wahana Ottomitra and Lippo General

Assuming the 90 days trading horizon Wahana Ottomitra Multiartha is expected to generate 1.08 times more return on investment than Lippo General. However, Wahana Ottomitra is 1.08 times more volatile than Lippo General Insurance. It trades about 0.03 of its potential returns per unit of risk. Lippo General Insurance is currently generating about -0.12 per unit of risk. If you would invest  35,000  in Wahana Ottomitra Multiartha on September 17, 2024 and sell it today you would earn a total of  200.00  from holding Wahana Ottomitra Multiartha or generate 0.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Wahana Ottomitra Multiartha  vs.  Lippo General Insurance

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.

Lippo General Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lippo General Insurance 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 Lippo General

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

The idea behind Wahana Ottomitra Multiartha and Lippo General Insurance 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.