Correlation Between Duta Pertiwi and Wilmar Cahaya
Can any of the company-specific risk be diversified away by investing in both Duta Pertiwi 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 Duta Pertiwi and Wilmar Cahaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duta Pertiwi Nusantara and Wilmar Cahaya Indonesia, you can compare the effects of market volatilities on Duta Pertiwi 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 Duta Pertiwi with a short position of Wilmar Cahaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duta Pertiwi and Wilmar Cahaya.
Diversification Opportunities for Duta Pertiwi and Wilmar Cahaya
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Duta and Wilmar is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Duta Pertiwi Nusantara 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 Duta Pertiwi 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 Duta Pertiwi Nusantara 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 Duta Pertiwi i.e., Duta Pertiwi and Wilmar Cahaya go up and down completely randomly.
Pair Corralation between Duta Pertiwi and Wilmar Cahaya
Assuming the 90 days trading horizon Duta Pertiwi Nusantara is expected to under-perform the Wilmar Cahaya. In addition to that, Duta Pertiwi is 1.55 times more volatile than Wilmar Cahaya Indonesia. It trades about -0.04 of its total potential returns per unit of risk. Wilmar Cahaya Indonesia is currently generating about 0.02 per unit of volatility. If you would invest 180,968 in Wilmar Cahaya Indonesia on November 27, 2024 and sell it today you would earn a total of 19,032 from holding Wilmar Cahaya Indonesia or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Duta Pertiwi Nusantara vs. Wilmar Cahaya Indonesia
Performance |
| Timeline |
| Duta Pertiwi Nusantara |
| Wilmar Cahaya Indonesia |
Duta Pertiwi and Wilmar Cahaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duta Pertiwi and Wilmar Cahaya
The main advantage of trading using opposite Duta Pertiwi and Wilmar Cahaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duta Pertiwi 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.| Duta Pertiwi vs. Intanwijaya Internasional Tbk | Duta Pertiwi vs. Betonjaya Manunggal Tbk | Duta Pertiwi vs. Asiaplast Industries Tbk | Duta Pertiwi vs. Argha Karya Prima |
| Wilmar Cahaya vs. Austindo Nusantara Jaya | Wilmar Cahaya vs. Mahkota Group Tbk | Wilmar Cahaya vs. Borneo Olah Sarana | Wilmar Cahaya vs. Estika Tata Tiara |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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