Correlation Between PT Cilacap and Widodo Makmur
Can any of the company-specific risk be diversified away by investing in both PT Cilacap 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 PT Cilacap and Widodo Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Cilacap Samudera and Widodo Makmur Unggas, you can compare the effects of market volatilities on PT Cilacap 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 PT Cilacap with a short position of Widodo Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Cilacap and Widodo Makmur.
Diversification Opportunities for PT Cilacap and Widodo Makmur
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASHA and Widodo is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding PT Cilacap Samudera 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 PT Cilacap 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 PT Cilacap Samudera 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 PT Cilacap i.e., PT Cilacap and Widodo Makmur go up and down completely randomly.
Pair Corralation between PT Cilacap and Widodo Makmur
Assuming the 90 days trading horizon PT Cilacap Samudera is expected to under-perform the Widodo Makmur. But the stock apears to be less risky and, when comparing its historical volatility, PT Cilacap Samudera is 1.12 times less risky than Widodo Makmur. The stock trades about -0.11 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 |
PT Cilacap Samudera vs. Widodo Makmur Unggas
Performance |
| Timeline |
| PT Cilacap Samudera |
| Widodo Makmur Unggas |
PT Cilacap and Widodo Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Cilacap and Widodo Makmur
The main advantage of trading using opposite PT Cilacap and Widodo Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Cilacap 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.| PT Cilacap vs. PT Dewi Shri | PT Cilacap vs. PT Data Sinergitama | PT Cilacap vs. PAM Mineral Tbk | PT Cilacap vs. Autopedia Sukses Lestari |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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