Correlation Between Astra International and Wilton Makmur
Can any of the company-specific risk be diversified away by investing in both Astra International and Wilton 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 Astra International and Wilton Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra International Tbk and Wilton Makmur Indonesia, you can compare the effects of market volatilities on Astra International and Wilton 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 Astra International with a short position of Wilton Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Wilton Makmur.
Diversification Opportunities for Astra International and Wilton Makmur
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and Wilton is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Wilton Makmur Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilton Makmur Indonesia and Astra International 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 International Tbk are associated (or correlated) with Wilton Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilton Makmur Indonesia has no effect on the direction of Astra International i.e., Astra International and Wilton Makmur go up and down completely randomly.
Pair Corralation between Astra International and Wilton Makmur
Assuming the 90 days trading horizon Astra International is expected to generate 45.31 times less return on investment than Wilton Makmur. But when comparing it to its historical volatility, Astra International Tbk is 4.0 times less risky than Wilton Makmur. It trades about 0.02 of its potential returns per unit of risk. Wilton Makmur Indonesia is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,900 in Wilton Makmur Indonesia on August 30, 2024 and sell it today you would earn a total of 1,000.00 from holding Wilton Makmur Indonesia or generate 34.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra International Tbk vs. Wilton Makmur Indonesia
Performance |
| Timeline |
| Astra International Tbk |
| Wilton Makmur Indonesia |
Astra International and Wilton Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Wilton Makmur
The main advantage of trading using opposite Astra International and Wilton Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Wilton 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 Wilton Makmur will offset losses from the drop in Wilton Makmur's long position.| Astra International vs. Telkom Indonesia Tbk | Astra International vs. Bank Mandiri Persero | Astra International vs. Bank Central Asia | Astra International vs. PT Indofood Sukses |
| Wilton Makmur vs. Petrosea Tbk | Wilton Makmur vs. Harum Energy Tbk | Wilton Makmur vs. Perdana Karya Perkasa | Wilton Makmur vs. Bayan Resources Tbk |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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