Correlation Between Ulima Nitra and Widodo Makmur
Can any of the company-specific risk be diversified away by investing in both Ulima Nitra and Widodo Makmur 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 Ulima Nitra and Widodo Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ulima Nitra PT and Widodo Makmur Unggas, you can compare the effects of market volatilities on Ulima Nitra and Widodo Makmur 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 Ulima Nitra with a short position of Widodo Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ulima Nitra and Widodo Makmur.
Diversification Opportunities for Ulima Nitra and Widodo Makmur
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ulima and Widodo is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ulima Nitra PT and Widodo Makmur Unggas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Widodo Makmur Unggas and Ulima Nitra 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 Ulima Nitra PT are associated (or correlated) with Widodo Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Widodo Makmur Unggas has no effect on the direction of Ulima Nitra i.e., Ulima Nitra and Widodo Makmur go up and down completely randomly.
Pair Corralation between Ulima Nitra and Widodo Makmur
Assuming the 90 days trading horizon Ulima Nitra PT is expected to generate 0.39 times more return on investment than Widodo Makmur. However, Ulima Nitra PT is 2.58 times less risky than Widodo Makmur. It trades about 0.38 of its potential returns per unit of risk. Widodo Makmur Unggas is currently generating about 0.03 per unit of risk. If you would invest 55,000 in Ulima Nitra PT on August 30, 2024 and sell it today you would earn a total of 11,500 from holding Ulima Nitra PT or generate 20.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ulima Nitra PT vs. Widodo Makmur Unggas
Performance |
| Timeline |
| Ulima Nitra PT |
| Widodo Makmur Unggas |
Ulima Nitra and Widodo Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ulima Nitra and Widodo Makmur
The main advantage of trading using opposite Ulima Nitra and Widodo Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ulima Nitra position performs unexpectedly, Widodo Makmur 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 Widodo Makmur will offset losses from the drop in Widodo Makmur's long position.| Ulima Nitra vs. Widodo Makmur Unggas | Ulima Nitra vs. Borneo Olah Sarana | Ulima Nitra vs. PT Sunter Lakeside | Ulima Nitra vs. Era Mandiri Cemerlang |
| Widodo Makmur vs. Putra Rajawali Kencana | Widodo Makmur vs. Sinergi Inti Plastindo | Widodo Makmur vs. Karya Bersama Anugerah | Widodo Makmur vs. Jasnita Telekomindo 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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