Correlation Between Garudafood Putra and Wahana Pronatural

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

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

Diversification Opportunities for Garudafood Putra and Wahana Pronatural

-0.07

Correlation Coefficient

Garudafood Putra  Wahana Pronatural

Good diversification

The 3 months correlation between Garudafood and Wahana is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Wahana Pronatural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Pronatural and Garudafood Putra 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 Garudafood Putra Putri 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 Garudafood Putra i.e., Garudafood Putra and Wahana Pronatural go up and down completely randomly.

Pair Corralation between Garudafood Putra and Wahana Pronatural

Assuming the 90 days trading horizon Garudafood Putra Putri is expected to generate 0.31 times more return on investment than Wahana Pronatural. However, Garudafood Putra Putri is 3.27 times less risky than Wahana Pronatural. It trades about -0.02 of its potential returns per unit of risk. Wahana Pronatural is currently generating about -0.03 per unit of risk. If you would invest  47,719  in Garudafood Putra Putri on September 14, 2024 and sell it today you would lose (7,519) from holding Garudafood Putra Putri or give up 15.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Garudafood Putra Putri  vs.  Wahana Pronatural

Garudafood Putra Putri

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Garudafood Putra Putri are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Garudafood Putra may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wahana Pronatural

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wahana Pronatural 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.

Pair Trading with Garudafood Putra and Wahana Pronatural

The main advantage of trading using opposite Garudafood Putra and Wahana Pronatural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra 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 Garudafood Putra Putri 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.