Correlation Between Wilmar International and KWS SAAT
Can any of the company-specific risk be diversified away by investing in both Wilmar International and KWS SAAT 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 Wilmar International and KWS SAAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilmar International Limited and KWS SAAT SE, you can compare the effects of market volatilities on Wilmar International and KWS SAAT 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 Wilmar International with a short position of KWS SAAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmar International and KWS SAAT.
Diversification Opportunities for Wilmar International and KWS SAAT
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wilmar and KWS is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Wilmar International Limited and KWS SAAT SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWS SAAT SE and Wilmar International 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 Wilmar International Limited are associated (or correlated) with KWS SAAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWS SAAT SE has no effect on the direction of Wilmar International i.e., Wilmar International and KWS SAAT go up and down completely randomly.
Pair Corralation between Wilmar International and KWS SAAT
Assuming the 90 days trading horizon Wilmar International Limited is expected to generate 0.48 times more return on investment than KWS SAAT. However, Wilmar International Limited is 2.1 times less risky than KWS SAAT. It trades about 0.07 of its potential returns per unit of risk. KWS SAAT SE is currently generating about -0.11 per unit of risk. If you would invest 213.00 in Wilmar International Limited on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Wilmar International Limited or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmar International Limited vs. KWS SAAT SE
Performance |
| Timeline |
| Wilmar International |
| KWS SAAT SE |
Wilmar International and KWS SAAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmar International and KWS SAAT
The main advantage of trading using opposite Wilmar International and KWS SAAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmar International position performs unexpectedly, KWS SAAT 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 KWS SAAT will offset losses from the drop in KWS SAAT's long position.| Wilmar International vs. Tianjin Capital Environmental | Wilmar International vs. Marie Brizard Wine | Wilmar International vs. United States Steel | Wilmar International vs. KINGBOARD CHEMICAL |
| KWS SAAT vs. Archer Daniels Midland | KWS SAAT vs. Tyson Foods | KWS SAAT vs. Wilmar International Limited | KWS SAAT vs. SalMar ASA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |