Correlation Between Wilmar Cahaya and Delta Djakarta
Can any of the company-specific risk be diversified away by investing in both Wilmar Cahaya and Delta Djakarta 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 Delta Djakarta 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 Delta Djakarta Tbk, you can compare the effects of market volatilities on Wilmar Cahaya and Delta Djakarta 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 Delta Djakarta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmar Cahaya and Delta Djakarta.
Diversification Opportunities for Wilmar Cahaya and Delta Djakarta
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wilmar and Delta is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Wilmar Cahaya Indonesia and Delta Djakarta Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Djakarta 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 Delta Djakarta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Djakarta Tbk has no effect on the direction of Wilmar Cahaya i.e., Wilmar Cahaya and Delta Djakarta go up and down completely randomly.
Pair Corralation between Wilmar Cahaya and Delta Djakarta
Assuming the 90 days trading horizon Wilmar Cahaya Indonesia is expected to generate 1.19 times more return on investment than Delta Djakarta. However, Wilmar Cahaya is 1.19 times more volatile than Delta Djakarta Tbk. It trades about 0.05 of its potential returns per unit of risk. Delta Djakarta Tbk is currently generating about -0.13 per unit of risk. If you would invest 177,132 in Wilmar Cahaya Indonesia on August 26, 2024 and sell it today you would earn a total of 26,868 from holding Wilmar Cahaya Indonesia or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmar Cahaya Indonesia vs. Delta Djakarta Tbk
Performance |
| Timeline |
| Wilmar Cahaya Indonesia |
| Delta Djakarta Tbk |
Wilmar Cahaya and Delta Djakarta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmar Cahaya and Delta Djakarta
The main advantage of trading using opposite Wilmar Cahaya and Delta Djakarta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmar Cahaya position performs unexpectedly, Delta Djakarta 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 Delta Djakarta will offset losses from the drop in Delta Djakarta's long position.| Wilmar Cahaya vs. Charoen Pokphand Indonesia | Wilmar Cahaya vs. Kalbe Farma Tbk | Wilmar Cahaya vs. Indofood Cbp Sukses | Wilmar Cahaya vs. Akr Corporindo Tbk |
| Delta Djakarta vs. Charoen Pokphand Indonesia | Delta Djakarta vs. Kalbe Farma Tbk | Delta Djakarta vs. Indofood Cbp Sukses | Delta Djakarta 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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