Correlation Between Wilmar Cahaya and Enseval Putra
Can any of the company-specific risk be diversified away by investing in both Wilmar Cahaya and Enseval Putra 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 Enseval Putra 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 Enseval Putra Megatrading, you can compare the effects of market volatilities on Wilmar Cahaya and Enseval Putra 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 Enseval Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmar Cahaya and Enseval Putra.
Diversification Opportunities for Wilmar Cahaya and Enseval Putra
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wilmar and Enseval is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Wilmar Cahaya Indonesia and Enseval Putra Megatrading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enseval Putra Megatrading 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 Enseval Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enseval Putra Megatrading has no effect on the direction of Wilmar Cahaya i.e., Wilmar Cahaya and Enseval Putra go up and down completely randomly.
Pair Corralation between Wilmar Cahaya and Enseval Putra
Assuming the 90 days trading horizon Wilmar Cahaya Indonesia is expected to generate 1.17 times more return on investment than Enseval Putra. However, Wilmar Cahaya is 1.17 times more volatile than Enseval Putra Megatrading. It trades about 0.03 of its potential returns per unit of risk. Enseval Putra Megatrading is currently generating about 0.01 per unit of risk. If you would invest 177,366 in Wilmar Cahaya Indonesia on August 26, 2024 and sell it today you would earn a total of 26,634 from holding Wilmar Cahaya Indonesia or generate 15.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmar Cahaya Indonesia vs. Enseval Putra Megatrading
Performance |
| Timeline |
| Wilmar Cahaya Indonesia |
| Enseval Putra Megatrading |
Wilmar Cahaya and Enseval Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmar Cahaya and Enseval Putra
The main advantage of trading using opposite Wilmar Cahaya and Enseval Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmar Cahaya position performs unexpectedly, Enseval Putra 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 Enseval Putra will offset losses from the drop in Enseval Putra'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 |
| Enseval Putra vs. Astra Graphia Tbk | Enseval Putra vs. Hexindo Adiperkasa Tbk | Enseval Putra vs. Lautan Luas Tbk | Enseval Putra vs. Citra Marga Nusaphala |
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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