Correlation Between Akr Corporindo and Wahana Pronatural
Can any of the company-specific risk be diversified away by investing in both Akr Corporindo 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 Akr Corporindo and Wahana Pronatural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akr Corporindo Tbk and Wahana Pronatural, you can compare the effects of market volatilities on Akr Corporindo 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 Akr Corporindo with a short position of Wahana Pronatural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akr Corporindo and Wahana Pronatural.
Diversification Opportunities for Akr Corporindo and Wahana Pronatural
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Akr and Wahana is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Akr Corporindo Tbk and Wahana Pronatural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Pronatural and Akr Corporindo 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 Akr Corporindo 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 Akr Corporindo i.e., Akr Corporindo and Wahana Pronatural go up and down completely randomly.
Pair Corralation between Akr Corporindo and Wahana Pronatural
Assuming the 90 days trading horizon Akr Corporindo Tbk is expected to under-perform the Wahana Pronatural. But the stock apears to be less risky and, when comparing its historical volatility, Akr Corporindo Tbk is 2.51 times less risky than Wahana Pronatural. The stock trades about 0.0 of its potential returns per unit of risk. The Wahana Pronatural is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,400 in Wahana Pronatural on November 24, 2024 and sell it today you would earn a total of 3,800 from holding Wahana Pronatural or generate 40.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Akr Corporindo Tbk vs. Wahana Pronatural
Performance |
Timeline |
Akr Corporindo Tbk |
Wahana Pronatural |
Akr Corporindo and Wahana Pronatural Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Akr Corporindo and Wahana Pronatural
The main advantage of trading using opposite Akr Corporindo and Wahana Pronatural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akr Corporindo 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.Akr Corporindo vs. Charoen Pokphand Indonesia | ||
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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