Correlation Between Chandra Asri and Wahana Pronatural
Can any of the company-specific risk be diversified away by investing in both Chandra Asri 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 Chandra Asri and Wahana Pronatural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chandra Asri Petrochemical and Wahana Pronatural, you can compare the effects of market volatilities on Chandra Asri 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 Chandra Asri with a short position of Wahana Pronatural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Wahana Pronatural.
Diversification Opportunities for Chandra Asri and Wahana Pronatural
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chandra and Wahana is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical and Wahana Pronatural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Pronatural and Chandra Asri 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 Chandra Asri Petrochemical 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 Chandra Asri i.e., Chandra Asri and Wahana Pronatural go up and down completely randomly.
Pair Corralation between Chandra Asri and Wahana Pronatural
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Wahana Pronatural. In addition to that, Chandra Asri is 1.87 times more volatile than Wahana Pronatural. It trades about -0.21 of its total potential returns per unit of risk. Wahana Pronatural is currently generating about -0.15 per unit of volatility. If you would invest 10,100 in Wahana Pronatural on August 31, 2024 and sell it today you would lose (900.00) from holding Wahana Pronatural or give up 8.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Wahana Pronatural
Performance |
| Timeline |
| Chandra Asri Petroch |
| Wahana Pronatural |
Chandra Asri and Wahana Pronatural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Wahana Pronatural
The main advantage of trading using opposite Chandra Asri and Wahana Pronatural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri 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.| Chandra Asri vs. Perusahaan Gas Negara | Chandra Asri vs. Vale Indonesia Tbk | Chandra Asri vs. Telkom Indonesia Tbk | Chandra Asri vs. Mitra Pinasthika Mustika |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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