Correlation Between Tira Austenite and Wahana Pronatural
Can any of the company-specific risk be diversified away by investing in both Tira Austenite and Wahana Pronatural 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 Tira Austenite and Wahana Pronatural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tira Austenite Tbk and Wahana Pronatural, you can compare the effects of market volatilities on Tira Austenite and Wahana Pronatural 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 Tira Austenite with a short position of Wahana Pronatural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tira Austenite and Wahana Pronatural.
Diversification Opportunities for Tira Austenite and Wahana Pronatural
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tira and Wahana is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Tira Austenite Tbk and Wahana Pronatural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Pronatural and Tira Austenite 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 Tira Austenite Tbk are associated (or correlated) with Wahana Pronatural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Pronatural has no effect on the direction of Tira Austenite i.e., Tira Austenite and Wahana Pronatural go up and down completely randomly.
Pair Corralation between Tira Austenite and Wahana Pronatural
Assuming the 90 days trading horizon Tira Austenite Tbk is expected to generate 2.95 times more return on investment than Wahana Pronatural. However, Tira Austenite is 2.95 times more volatile than Wahana Pronatural. It trades about 0.05 of its potential returns per unit of risk. Wahana Pronatural is currently generating about -0.1 per unit of risk. If you would invest 41,400 in Tira Austenite Tbk on September 3, 2024 and sell it today you would earn a total of 7,800 from holding Tira Austenite Tbk or generate 18.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tira Austenite Tbk vs. Wahana Pronatural
Performance |
| Timeline |
| Tira Austenite Tbk |
| Wahana Pronatural |
Tira Austenite and Wahana Pronatural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tira Austenite and Wahana Pronatural
The main advantage of trading using opposite Tira Austenite and Wahana Pronatural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tira Austenite position performs unexpectedly, Wahana Pronatural 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 Wahana Pronatural will offset losses from the drop in Wahana Pronatural's long position.| Tira Austenite vs. Tigaraksa Satria Tbk | Tira Austenite vs. Wicaksana Overseas International | Tira Austenite vs. Wahana Pronatural | Tira Austenite vs. Millennium Pharmacon International |
| Wahana Pronatural vs. Wicaksana Overseas International | Wahana Pronatural vs. Millennium Pharmacon International | Wahana Pronatural vs. Tigaraksa Satria Tbk | Wahana Pronatural vs. Tempo Inti Media |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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