Correlation Between HEXINDO ADIPERKASA and Wal Mart
Can any of the company-specific risk be diversified away by investing in both HEXINDO ADIPERKASA and Wal Mart 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 HEXINDO ADIPERKASA and Wal Mart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEXINDO ADIPERKASA and Wal Mart de Mxico, you can compare the effects of market volatilities on HEXINDO ADIPERKASA and Wal Mart 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 HEXINDO ADIPERKASA with a short position of Wal Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEXINDO ADIPERKASA and Wal Mart.
Diversification Opportunities for HEXINDO ADIPERKASA and Wal Mart
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HEXINDO and Wal is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding HEXINDO ADIPERKASA and Wal Mart de Mxico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wal Mart de and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA are associated (or correlated) with Wal Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wal Mart de has no effect on the direction of HEXINDO ADIPERKASA i.e., HEXINDO ADIPERKASA and Wal Mart go up and down completely randomly.
Pair Corralation between HEXINDO ADIPERKASA and Wal Mart
Assuming the 90 days trading horizon HEXINDO ADIPERKASA is expected to generate 0.43 times more return on investment than Wal Mart. However, HEXINDO ADIPERKASA is 2.32 times less risky than Wal Mart. It trades about 0.13 of its potential returns per unit of risk. Wal Mart de Mxico is currently generating about 0.02 per unit of risk. If you would invest 26.00 in HEXINDO ADIPERKASA on November 1, 2024 and sell it today you would earn a total of 1.00 from holding HEXINDO ADIPERKASA or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
HEXINDO ADIPERKASA vs. Wal Mart de Mxico
Performance |
| Timeline |
| HEXINDO ADIPERKASA |
| Wal Mart de |
HEXINDO ADIPERKASA and Wal Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEXINDO ADIPERKASA and Wal Mart
The main advantage of trading using opposite HEXINDO ADIPERKASA and Wal Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEXINDO ADIPERKASA position performs unexpectedly, Wal Mart 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 Wal Mart will offset losses from the drop in Wal Mart's long position.| HEXINDO ADIPERKASA vs. X FAB Silicon Foundries | HEXINDO ADIPERKASA vs. Chiba Bank | HEXINDO ADIPERKASA vs. Cognizant Technology Solutions | HEXINDO ADIPERKASA vs. Synchrony Financial |
| Wal Mart vs. Tencent Music Entertainment | Wal Mart vs. Texas Roadhouse | Wal Mart vs. UNIVERSAL MUSIC GROUP | Wal Mart vs. INFORMATION SVC GRP |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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