Correlation Between Wilmar Cahaya and Astra Graphia
Can any of the company-specific risk be diversified away by investing in both Wilmar Cahaya and Astra Graphia 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 Wilmar Cahaya and Astra Graphia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilmar Cahaya Indonesia and Astra Graphia Tbk, you can compare the effects of market volatilities on Wilmar Cahaya and Astra Graphia 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 Wilmar Cahaya with a short position of Astra Graphia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmar Cahaya and Astra Graphia.
Diversification Opportunities for Wilmar Cahaya and Astra Graphia
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wilmar and Astra is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wilmar Cahaya Indonesia and Astra Graphia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Graphia Tbk and Wilmar Cahaya 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 Wilmar Cahaya Indonesia are associated (or correlated) with Astra Graphia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Graphia Tbk has no effect on the direction of Wilmar Cahaya i.e., Wilmar Cahaya and Astra Graphia go up and down completely randomly.
Pair Corralation between Wilmar Cahaya and Astra Graphia
Assuming the 90 days trading horizon Wilmar Cahaya Indonesia is expected to under-perform the Astra Graphia. In addition to that, Wilmar Cahaya is 1.19 times more volatile than Astra Graphia Tbk. It trades about -0.22 of its total potential returns per unit of risk. Astra Graphia Tbk is currently generating about -0.22 per unit of volatility. 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 |
Wilmar Cahaya Indonesia vs. Astra Graphia Tbk
Performance |
| Timeline |
| Wilmar Cahaya Indonesia |
| Astra Graphia Tbk |
Wilmar Cahaya and Astra Graphia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmar Cahaya and Astra Graphia
The main advantage of trading using opposite Wilmar Cahaya and Astra Graphia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmar Cahaya position performs unexpectedly, Astra Graphia 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 Astra Graphia will offset losses from the drop in Astra Graphia's long position.| 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 |
| Astra Graphia vs. Astra Otoparts Tbk | Astra Graphia vs. Citra Marga Nusaphala | Astra Graphia vs. Hexindo Adiperkasa Tbk | Astra Graphia vs. Metrodata Electronics 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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