Correlation Between Unilever Indonesia and Delta Djakarta
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Delta Djakarta 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 Unilever Indonesia and Delta Djakarta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Indonesia Tbk and Delta Djakarta Tbk, you can compare the effects of market volatilities on Unilever Indonesia and Delta Djakarta 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 Unilever Indonesia with a short position of Delta Djakarta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Delta Djakarta.
Diversification Opportunities for Unilever Indonesia and Delta Djakarta
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Unilever and Delta is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Delta Djakarta Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Djakarta Tbk and Unilever Indonesia 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 Unilever Indonesia Tbk are associated (or correlated) with Delta Djakarta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Djakarta Tbk has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Delta Djakarta go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Delta Djakarta
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to under-perform the Delta Djakarta. In addition to that, Unilever Indonesia is 1.42 times more volatile than Delta Djakarta Tbk. It trades about -0.16 of its total potential returns per unit of risk. Delta Djakarta Tbk is currently generating about -0.15 per unit of volatility. If you would invest 291,000 in Delta Djakarta Tbk on August 31, 2024 and sell it today you would lose (76,000) from holding Delta Djakarta Tbk or give up 26.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Delta Djakarta Tbk
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Delta Djakarta Tbk |
Unilever Indonesia and Delta Djakarta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Delta Djakarta
The main advantage of trading using opposite Unilever Indonesia and Delta Djakarta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Delta Djakarta 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 Delta Djakarta will offset losses from the drop in Delta Djakarta's long position.| Unilever Indonesia vs. PT Indofood Sukses | Unilever Indonesia vs. Astra International Tbk | Unilever Indonesia vs. Telkom Indonesia Tbk | Unilever Indonesia vs. Bank Central Asia |
| Delta Djakarta vs. Multi Bintang Indonesia | Delta Djakarta vs. Wilmar Cahaya Indonesia | Delta Djakarta vs. Darya Varia Laboratoria Tbk | Delta Djakarta vs. Akasha Wira International |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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