Correlation Between Golden Agri-Resources and Wilmar International
Can any of the company-specific risk be diversified away by investing in both Golden Agri-Resources and Wilmar International 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 Golden Agri-Resources and Wilmar International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Agri Resources and Wilmar International, you can compare the effects of market volatilities on Golden Agri-Resources and Wilmar International 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 Golden Agri-Resources with a short position of Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri-Resources and Wilmar International.
Diversification Opportunities for Golden Agri-Resources and Wilmar International
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Wilmar is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Wilmar International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International and Golden Agri-Resources 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 Golden Agri Resources are associated (or correlated) with Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Golden Agri-Resources i.e., Golden Agri-Resources and Wilmar International go up and down completely randomly.
Pair Corralation between Golden Agri-Resources and Wilmar International
Assuming the 90 days horizon Golden Agri Resources is expected to generate 8.62 times more return on investment than Wilmar International. However, Golden Agri-Resources is 8.62 times more volatile than Wilmar International. It trades about 0.3 of its potential returns per unit of risk. Wilmar International is currently generating about 0.04 per unit of risk. If you would invest 13.00 in Golden Agri Resources on October 26, 2024 and sell it today you would earn a total of 10.00 from holding Golden Agri Resources or generate 76.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Agri Resources vs. Wilmar International
Performance |
| Timeline |
| Golden Agri Resources |
| Wilmar International |
Golden Agri-Resources and Wilmar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri-Resources and Wilmar International
The main advantage of trading using opposite Golden Agri-Resources and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri-Resources position performs unexpectedly, Wilmar International 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 International will offset losses from the drop in Wilmar International's long position.| Golden Agri-Resources vs. Wilmar International | Golden Agri-Resources vs. SLC Agricola SA | Golden Agri-Resources vs. Brasilagro Adr | Golden Agri-Resources vs. Alico Inc |
| Wilmar International vs. Wilmar International Limited | Wilmar International vs. Wesfarmers Ltd ADR | Wilmar International vs. United Overseas Bank | Wilmar International vs. Kerry Group PLC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Stocks Directory Find actively traded stocks across global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |