Correlation Between Megapolitan Developments and Bank Woori

Can any of the company-specific risk be diversified away by investing in both Megapolitan Developments and Bank Woori 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 Megapolitan Developments and Bank Woori into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Megapolitan Developments Tbk and Bank Woori Saudara, you can compare the effects of market volatilities on Megapolitan Developments and Bank Woori 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 Megapolitan Developments with a short position of Bank Woori. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megapolitan Developments and Bank Woori.

Diversification Opportunities for Megapolitan Developments and Bank Woori

0.53

Correlation Coefficient

Megapolitan Developments  Bank Woori

Very weak diversification

The 3 months correlation between Megapolitan and Bank is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Megapolitan Developments Tbk and Bank Woori Saudara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Woori Saudara and Megapolitan Developments 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 Megapolitan Developments Tbk are associated (or correlated) with Bank Woori. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Woori Saudara has no effect on the direction of Megapolitan Developments i.e., Megapolitan Developments and Bank Woori go up and down completely randomly.

Pair Corralation between Megapolitan Developments and Bank Woori

Assuming the 90 days trading horizon Megapolitan Developments Tbk is expected to generate 1.6 times more return on investment than Bank Woori. However, Megapolitan Developments is 1.6 times more volatile than Bank Woori Saudara. It trades about 0.01 of its potential returns per unit of risk. Bank Woori Saudara is currently generating about -0.42 per unit of risk. If you would invest  9,100  in Megapolitan Developments Tbk on April 5, 2025 and sell it today you would earn a total of  0.00  from holding Megapolitan Developments Tbk or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Megapolitan Developments Tbk  vs.  Bank Woori Saudara

Megapolitan Developments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Megapolitan Developments Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Megapolitan Developments is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bank Woori Saudara

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Woori Saudara 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 Megapolitan Developments and Bank Woori

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

The idea behind Megapolitan Developments Tbk and Bank Woori Saudara 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.