Correlation Between Astra Graphia and Wilmar Cahaya
Can any of the company-specific risk be diversified away by investing in both Astra Graphia and Wilmar Cahaya 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 Astra Graphia and Wilmar Cahaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Graphia Tbk and Wilmar Cahaya Indonesia, you can compare the effects of market volatilities on Astra Graphia and Wilmar Cahaya 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 Astra Graphia with a short position of Wilmar Cahaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Graphia and Wilmar Cahaya.
Diversification Opportunities for Astra Graphia and Wilmar Cahaya
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astra and Wilmar is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Astra Graphia Tbk and Wilmar Cahaya Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar Cahaya Indonesia and Astra Graphia 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 Astra Graphia Tbk are associated (or correlated) with Wilmar Cahaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar Cahaya Indonesia has no effect on the direction of Astra Graphia i.e., Astra Graphia and Wilmar Cahaya go up and down completely randomly.
Pair Corralation between Astra Graphia and Wilmar Cahaya
Assuming the 90 days trading horizon Astra Graphia Tbk is expected to generate 0.84 times more return on investment than Wilmar Cahaya. However, Astra Graphia Tbk is 1.19 times less risky than Wilmar Cahaya. It trades about -0.22 of its potential returns per unit of risk. Wilmar Cahaya Indonesia is currently generating about -0.22 per unit of risk. If you would invest 89,500 in Astra Graphia Tbk on September 1, 2024 and sell it today you would lose (4,500) from holding Astra Graphia Tbk or give up 5.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Graphia Tbk vs. Wilmar Cahaya Indonesia
Performance |
| Timeline |
| Astra Graphia Tbk |
| Wilmar Cahaya Indonesia |
Astra Graphia and Wilmar Cahaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Graphia and Wilmar Cahaya
The main advantage of trading using opposite Astra Graphia and Wilmar Cahaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Graphia position performs unexpectedly, Wilmar Cahaya 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 Wilmar Cahaya will offset losses from the drop in Wilmar Cahaya's long position.| Astra Graphia vs. Astra Otoparts Tbk | Astra Graphia vs. Citra Marga Nusaphala | Astra Graphia vs. Hexindo Adiperkasa Tbk | Astra Graphia vs. Metrodata Electronics Tbk |
| Wilmar Cahaya vs. Delta Djakarta Tbk | Wilmar Cahaya vs. Akasha Wira International | Wilmar Cahaya vs. Darya Varia Laboratoria Tbk | Wilmar Cahaya vs. Budi Starch Sweetener |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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