Correlation Between WIMFARM SA and PT Bank
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and PT Bank 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 WIMFARM SA and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and PT Bank Rakyat, you can compare the effects of market volatilities on WIMFARM SA and PT Bank 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 WIMFARM SA with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and PT Bank.
Diversification Opportunities for WIMFARM SA and PT Bank
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WIMFARM and BYRA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat and WIMFARM SA 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 WIMFARM SA EO are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and PT Bank go up and down completely randomly.
Pair Corralation between WIMFARM SA and PT Bank
Assuming the 90 days horizon WIMFARM SA EO is expected to under-perform the PT Bank. But the stock apears to be less risky and, when comparing its historical volatility, WIMFARM SA EO is 1.11 times less risky than PT Bank. The stock trades about -0.18 of its potential returns per unit of risk. The PT Bank Rakyat is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 30.00 in PT Bank Rakyat on September 3, 2024 and sell it today you would lose (5.00) from holding PT Bank Rakyat or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. PT Bank Rakyat
Performance |
| Timeline |
| WIMFARM SA EO |
| PT Bank Rakyat |
WIMFARM SA and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and PT Bank
The main advantage of trading using opposite WIMFARM SA and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| WIMFARM SA vs. SALESFORCE INC CDR | WIMFARM SA vs. EHEALTH | WIMFARM SA vs. YATRA ONLINE DL 0001 | WIMFARM SA vs. SWISS WATER DECAFFCOFFEE |
| PT Bank vs. Grand Canyon Education | PT Bank vs. Federal Agricultural Mortgage | PT Bank vs. DAIRY FARM INTL | PT Bank vs. WIMFARM SA EO |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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