Correlation Between Weha Transportasi and Anabatic Technologies

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Can any of the company-specific risk be diversified away by investing in both Weha Transportasi and Anabatic Technologies 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 Weha Transportasi and Anabatic Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weha Transportasi Indonesia and Anabatic Technologies Tbk, you can compare the effects of market volatilities on Weha Transportasi and Anabatic Technologies 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 Weha Transportasi with a short position of Anabatic Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weha Transportasi and Anabatic Technologies.

Diversification Opportunities for Weha Transportasi and Anabatic Technologies

-0.18
  Correlation Coefficient

Good diversification

The 3 months correlation between Weha and Anabatic is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Weha Transportasi Indonesia and Anabatic Technologies Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anabatic Technologies Tbk and Weha Transportasi 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 Weha Transportasi Indonesia are associated (or correlated) with Anabatic Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anabatic Technologies Tbk has no effect on the direction of Weha Transportasi i.e., Weha Transportasi and Anabatic Technologies go up and down completely randomly.

Pair Corralation between Weha Transportasi and Anabatic Technologies

Assuming the 90 days trading horizon Weha Transportasi Indonesia is expected to under-perform the Anabatic Technologies. In addition to that, Weha Transportasi is 1.76 times more volatile than Anabatic Technologies Tbk. It trades about -0.36 of its total potential returns per unit of risk. Anabatic Technologies Tbk is currently generating about -0.13 per unit of volatility. If you would invest  39,400  in Anabatic Technologies Tbk on August 30, 2024 and sell it today you would lose (1,600) from holding Anabatic Technologies Tbk or give up 4.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Weha Transportasi Indonesia  vs.  Anabatic Technologies Tbk

 Performance 
       Timeline  
Weha Transportasi 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Weha Transportasi Indonesia are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Weha Transportasi is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Anabatic Technologies Tbk 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Anabatic Technologies Tbk 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.

Weha Transportasi and Anabatic Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Weha Transportasi and Anabatic Technologies

The main advantage of trading using opposite Weha Transportasi and Anabatic Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weha Transportasi position performs unexpectedly, Anabatic Technologies 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 Anabatic Technologies will offset losses from the drop in Anabatic Technologies' long position.
The idea behind Weha Transportasi Indonesia and Anabatic Technologies Tbk 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.

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