Correlation Between Pan Brothers and Wahana Pronatural

Can any of the company-specific risk be diversified away by investing in both Pan Brothers 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 Pan Brothers and Wahana Pronatural into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pan Brothers Tbk and Wahana Pronatural, you can compare the effects of market volatilities on Pan Brothers 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 Pan Brothers with a short position of Wahana Pronatural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Brothers and Wahana Pronatural.

Diversification Opportunities for Pan Brothers and Wahana Pronatural

0.0

Correlation Coefficient

Pan Brothers  Wahana Pronatural

Pay attention - limited upside

The 3 months correlation between Pan and Wahana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pan Brothers Tbk and Wahana Pronatural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Pronatural and Pan Brothers 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 Pan Brothers 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 Pan Brothers i.e., Pan Brothers and Wahana Pronatural go up and down completely randomly.

Pair Corralation between Pan Brothers and Wahana Pronatural

If you would invest  13,600  in Wahana Pronatural on December 29, 2024 and sell it today you would lose (1,600) from holding Wahana Pronatural or give up 11.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pan Brothers Tbk  vs.  Wahana Pronatural

Pan Brothers Tbk

Risk-Adjusted Performance

Very Weak

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

Wahana Pronatural

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pan Brothers and Wahana Pronatural

The main advantage of trading using opposite Pan Brothers and Wahana Pronatural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Brothers 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.

The idea behind Pan Brothers Tbk and Wahana Pronatural 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.