Correlation Between Sejahteraraya Anugrahjaya and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Sejahteraraya Anugrahjaya and Wells Fargo 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 Sejahteraraya Anugrahjaya and Wells Fargo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejahteraraya Anugrahjaya Tbk and Wells Fargo, you can compare the effects of market volatilities on Sejahteraraya Anugrahjaya and Wells Fargo 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 Sejahteraraya Anugrahjaya with a short position of Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejahteraraya Anugrahjaya and Wells Fargo.
Diversification Opportunities for Sejahteraraya Anugrahjaya and Wells Fargo
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sejahteraraya and Wells is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sejahteraraya Anugrahjaya Tbk and Wells Fargo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo and Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya Tbk are associated (or correlated) with Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo has no effect on the direction of Sejahteraraya Anugrahjaya i.e., Sejahteraraya Anugrahjaya and Wells Fargo go up and down completely randomly.
Pair Corralation between Sejahteraraya Anugrahjaya and Wells Fargo
If you would invest 5,673 in Wells Fargo on January 25, 2024 and sell it today you would earn a total of 421.00 from holding Wells Fargo or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 71.43% |
| Values | Daily Returns |
Sejahteraraya Anugrahjaya Tbk vs. Wells Fargo
Performance |
| Timeline |
| Sejahteraraya Anugrahjaya |
| Wells Fargo |
Sejahteraraya Anugrahjaya and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sejahteraraya Anugrahjaya and Wells Fargo
The main advantage of trading using opposite Sejahteraraya Anugrahjaya and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejahteraraya Anugrahjaya position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.The idea behind Sejahteraraya Anugrahjaya Tbk and Wells Fargo 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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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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