Correlation Between Wilton Makmur and Rukun Raharja
Can any of the company-specific risk be diversified away by investing in both Wilton Makmur and Rukun Raharja 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 Wilton Makmur and Rukun Raharja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilton Makmur Indonesia and Rukun Raharja Tbk, you can compare the effects of market volatilities on Wilton Makmur and Rukun Raharja 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 Wilton Makmur with a short position of Rukun Raharja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilton Makmur and Rukun Raharja.
Diversification Opportunities for Wilton Makmur and Rukun Raharja
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wilton and Rukun is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wilton Makmur Indonesia and Rukun Raharja Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rukun Raharja Tbk and Wilton Makmur 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 Wilton Makmur Indonesia are associated (or correlated) with Rukun Raharja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rukun Raharja Tbk has no effect on the direction of Wilton Makmur i.e., Wilton Makmur and Rukun Raharja go up and down completely randomly.
Pair Corralation between Wilton Makmur and Rukun Raharja
Assuming the 90 days trading horizon Wilton Makmur is expected to generate 1.09 times less return on investment than Rukun Raharja. But when comparing it to its historical volatility, Wilton Makmur Indonesia is 1.1 times less risky than Rukun Raharja. It trades about 0.24 of its potential returns per unit of risk. Rukun Raharja Tbk is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 169,000 in Rukun Raharja Tbk on August 30, 2024 and sell it today you would earn a total of 64,000 from holding Rukun Raharja Tbk or generate 37.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilton Makmur Indonesia vs. Rukun Raharja Tbk
Performance |
| Timeline |
| Wilton Makmur Indonesia |
| Rukun Raharja Tbk |
Wilton Makmur and Rukun Raharja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilton Makmur and Rukun Raharja
The main advantage of trading using opposite Wilton Makmur and Rukun Raharja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilton Makmur position performs unexpectedly, Rukun Raharja 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 Rukun Raharja will offset losses from the drop in Rukun Raharja's long position.| Wilton Makmur vs. Petrosea Tbk | Wilton Makmur vs. Harum Energy Tbk | Wilton Makmur vs. Perdana Karya Perkasa | Wilton Makmur vs. Bayan Resources Tbk |
| Rukun Raharja vs. Petrosea Tbk | Rukun Raharja vs. Harum Energy Tbk | Rukun Raharja vs. Perdana Karya Perkasa | Rukun Raharja vs. Bayan Resources Tbk |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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