Correlation Between Enseval Putra and Wilmar Cahaya
Can any of the company-specific risk be diversified away by investing in both Enseval Putra 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 Enseval Putra and Wilmar Cahaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enseval Putra Megatrading and Wilmar Cahaya Indonesia, you can compare the effects of market volatilities on Enseval Putra 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 Enseval Putra with a short position of Wilmar Cahaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enseval Putra and Wilmar Cahaya.
Diversification Opportunities for Enseval Putra and Wilmar Cahaya
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Enseval and Wilmar is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Enseval Putra Megatrading 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 Enseval Putra 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 Enseval Putra Megatrading 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 Enseval Putra i.e., Enseval Putra and Wilmar Cahaya go up and down completely randomly.
Pair Corralation between Enseval Putra and Wilmar Cahaya
Assuming the 90 days trading horizon Enseval Putra Megatrading is expected to under-perform the Wilmar Cahaya. But the stock apears to be less risky and, when comparing its historical volatility, Enseval Putra Megatrading is 1.47 times less risky than Wilmar Cahaya. The stock trades about -0.01 of its potential returns per unit of risk. The Wilmar Cahaya Indonesia is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 184,710 in Wilmar Cahaya Indonesia on August 29, 2024 and sell it today you would earn a total of 18,290 from holding Wilmar Cahaya Indonesia or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enseval Putra Megatrading vs. Wilmar Cahaya Indonesia
Performance |
| Timeline |
| Enseval Putra Megatrading |
| Wilmar Cahaya Indonesia |
Enseval Putra and Wilmar Cahaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enseval Putra and Wilmar Cahaya
The main advantage of trading using opposite Enseval Putra and Wilmar Cahaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enseval Putra 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.| Enseval Putra vs. Astra Graphia Tbk | Enseval Putra vs. Hexindo Adiperkasa Tbk | Enseval Putra vs. Lautan Luas Tbk | Enseval Putra vs. Citra Marga Nusaphala |
| 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 |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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