Correlation Between PT Unilever and Clorox
Can any of the company-specific risk be diversified away by investing in both PT Unilever and Clorox 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 PT Unilever and Clorox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Unilever Indonesia and The Clorox, you can compare the effects of market volatilities on PT Unilever and Clorox 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 PT Unilever with a short position of Clorox. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Unilever and Clorox.
Diversification Opportunities for PT Unilever and Clorox
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UNLRF and Clorox is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding PT Unilever Indonesia and The Clorox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clorox and PT Unilever 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 PT Unilever Indonesia are associated (or correlated) with Clorox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clorox has no effect on the direction of PT Unilever i.e., PT Unilever and Clorox go up and down completely randomly.
Pair Corralation between PT Unilever and Clorox
Assuming the 90 days horizon PT Unilever Indonesia is expected to under-perform the Clorox. In addition to that, PT Unilever is 2.58 times more volatile than The Clorox. It trades about -0.06 of its total potential returns per unit of risk. The Clorox is currently generating about 0.02 per unit of volatility. If you would invest 15,902 in The Clorox on August 29, 2024 and sell it today you would earn a total of 833.00 from holding The Clorox or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.17% |
| Values | Daily Returns |
PT Unilever Indonesia vs. The Clorox
Performance |
| Timeline |
| PT Unilever Indonesia |
| Clorox |
PT Unilever and Clorox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Unilever and Clorox
The main advantage of trading using opposite PT Unilever and Clorox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Unilever position performs unexpectedly, Clorox 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 Clorox will offset losses from the drop in Clorox's long position.| PT Unilever vs. LOreal Co ADR | PT Unilever vs. Unilever PLC ADR | PT Unilever vs. Kimberly Clark | PT Unilever vs. The Clorox |
| Clorox vs. Colgate Palmolive | Clorox vs. Procter Gamble | Clorox vs. Unilever PLC ADR | Clorox vs. Church Dwight |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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