Correlation Between Indo Kordsa and Wilmar Cahaya
Can any of the company-specific risk be diversified away by investing in both Indo Kordsa 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 Indo Kordsa and Wilmar Cahaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Kordsa Tbk and Wilmar Cahaya Indonesia, you can compare the effects of market volatilities on Indo Kordsa 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 Indo Kordsa with a short position of Wilmar Cahaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Kordsa and Wilmar Cahaya.
Diversification Opportunities for Indo Kordsa and Wilmar Cahaya
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indo and Wilmar is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Indo Kordsa 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 Indo Kordsa 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 Indo Kordsa 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 Indo Kordsa i.e., Indo Kordsa and Wilmar Cahaya go up and down completely randomly.
Pair Corralation between Indo Kordsa and Wilmar Cahaya
Assuming the 90 days trading horizon Indo Kordsa Tbk is expected to generate 1.42 times more return on investment than Wilmar Cahaya. However, Indo Kordsa is 1.42 times more volatile than Wilmar Cahaya Indonesia. It trades about 0.03 of its potential returns per unit of risk. Wilmar Cahaya Indonesia is currently generating about -0.01 per unit of risk. If you would invest 580,000 in Indo Kordsa Tbk on October 26, 2024 and sell it today you would earn a total of 5,000 from holding Indo Kordsa Tbk or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Kordsa Tbk vs. Wilmar Cahaya Indonesia
Performance |
| Timeline |
| Indo Kordsa Tbk |
| Wilmar Cahaya Indonesia |
Indo Kordsa and Wilmar Cahaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Kordsa and Wilmar Cahaya
The main advantage of trading using opposite Indo Kordsa and Wilmar Cahaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Kordsa 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.| Indo Kordsa vs. Goodyear Indonesia Tbk | Indo Kordsa vs. Sepatu Bata Tbk | Indo Kordsa vs. Indospring Tbk | Indo Kordsa vs. Ever Shine Textile |
| Wilmar Cahaya vs. Alam Sutera Realty | Wilmar Cahaya vs. Sentul City Tbk | Wilmar Cahaya vs. Gajah Tunggal Tbk | Wilmar Cahaya vs. Akr Corporindo 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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