Correlation Between Diamond Food and Wahana Inti
Can any of the company-specific risk be diversified away by investing in both Diamond Food and Wahana Inti 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 Diamond Food and Wahana Inti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Food Indonesia and Wahana Inti MakmurTbk, you can compare the effects of market volatilities on Diamond Food and Wahana Inti 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 Diamond Food with a short position of Wahana Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Food and Wahana Inti.
Diversification Opportunities for Diamond Food and Wahana Inti
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Diamond and Wahana is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Food Indonesia and Wahana Inti MakmurTbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Inti MakmurTbk and Diamond Food 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 Diamond Food Indonesia are associated (or correlated) with Wahana Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Inti MakmurTbk has no effect on the direction of Diamond Food i.e., Diamond Food and Wahana Inti go up and down completely randomly.
Pair Corralation between Diamond Food and Wahana Inti
Assuming the 90 days trading horizon Diamond Food Indonesia is expected to under-perform the Wahana Inti. But the stock apears to be less risky and, when comparing its historical volatility, Diamond Food Indonesia is 4.38 times less risky than Wahana Inti. The stock trades about -0.01 of its potential returns per unit of risk. The Wahana Inti MakmurTbk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,700 in Wahana Inti MakmurTbk on September 12, 2024 and sell it today you would earn a total of 1,200 from holding Wahana Inti MakmurTbk or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Food Indonesia vs. Wahana Inti MakmurTbk
Performance |
| Timeline |
| Diamond Food Indonesia |
| Wahana Inti MakmurTbk |
Diamond Food and Wahana Inti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Food and Wahana Inti
The main advantage of trading using opposite Diamond Food and Wahana Inti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Food position performs unexpectedly, Wahana Inti 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 Wahana Inti will offset losses from the drop in Wahana Inti's long position.| Diamond Food vs. Sentra Food Indonesia | Diamond Food vs. Garudafood Putra Putri | Diamond Food vs. Wijaya Karya Bangunan | Diamond Food vs. Mitrabara Adiperdana PT |
| Wahana Inti vs. Mahkota Group Tbk | Wahana Inti vs. Palma Serasih PT | Wahana Inti vs. Cisadane Sawit Raya | Wahana Inti vs. Diamond Food Indonesia |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |