Correlation Between Archi Indonesia and Widodo Makmur
Can any of the company-specific risk be diversified away by investing in both Archi Indonesia and Widodo Makmur 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 Archi Indonesia and Widodo Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archi Indonesia Tbk and Widodo Makmur Unggas, you can compare the effects of market volatilities on Archi Indonesia and Widodo Makmur 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 Archi Indonesia with a short position of Widodo Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archi Indonesia and Widodo Makmur.
Diversification Opportunities for Archi Indonesia and Widodo Makmur
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Archi and Widodo is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Archi Indonesia Tbk and Widodo Makmur Unggas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Widodo Makmur Unggas and Archi Indonesia 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 Archi Indonesia Tbk are associated (or correlated) with Widodo Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Widodo Makmur Unggas has no effect on the direction of Archi Indonesia i.e., Archi Indonesia and Widodo Makmur go up and down completely randomly.
Pair Corralation between Archi Indonesia and Widodo Makmur
Assuming the 90 days trading horizon Archi Indonesia Tbk is expected to under-perform the Widodo Makmur. But the stock apears to be less risky and, when comparing its historical volatility, Archi Indonesia Tbk is 2.64 times less risky than Widodo Makmur. The stock trades about -0.09 of its potential returns per unit of risk. The Widodo Makmur Unggas is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Widodo Makmur Unggas on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Widodo Makmur Unggas or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Archi Indonesia Tbk vs. Widodo Makmur Unggas
Performance |
| Timeline |
| Archi Indonesia Tbk |
| Widodo Makmur Unggas |
Archi Indonesia and Widodo Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archi Indonesia and Widodo Makmur
The main advantage of trading using opposite Archi Indonesia and Widodo Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archi Indonesia position performs unexpectedly, Widodo Makmur 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 Widodo Makmur will offset losses from the drop in Widodo Makmur's long position.| Archi Indonesia vs. Triputra Agro Persada | Archi Indonesia vs. Berkah Beton Sadaya | Archi Indonesia vs. PAM Mineral Tbk | Archi Indonesia vs. PT Bukalapak |
| Widodo Makmur vs. Habco Trans Maritima | Widodo Makmur vs. PT Cilacap Samudera | Widodo Makmur vs. PT Sari Kreasi | Widodo Makmur vs. Autopedia Sukses Lestari |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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