Correlation Between Unilever Indonesia and Uni Charm
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Uni Charm 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 Uni Charm 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 Uni Charm Indonesia, you can compare the effects of market volatilities on Unilever Indonesia and Uni Charm 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 Uni Charm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Uni Charm.
Diversification Opportunities for Unilever Indonesia and Uni Charm
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Unilever and Uni is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Uni Charm Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni Charm Indonesia 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 Uni Charm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni Charm Indonesia has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Uni Charm go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Uni Charm
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to under-perform the Uni Charm. In addition to that, Unilever Indonesia is 1.29 times more volatile than Uni Charm Indonesia. It trades about -0.08 of its total potential returns per unit of risk. Uni Charm Indonesia is currently generating about -0.04 per unit of volatility. If you would invest 108,281 in Uni Charm Indonesia on August 24, 2024 and sell it today you would lose (31,281) from holding Uni Charm Indonesia or give up 28.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Uni Charm Indonesia
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Uni Charm Indonesia |
Unilever Indonesia and Uni Charm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Uni Charm
The main advantage of trading using opposite Unilever Indonesia and Uni Charm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Uni Charm 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 Uni Charm will offset losses from the drop in Uni Charm'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 |
| Uni Charm vs. Kino Indonesia Tbk | Uni Charm vs. Garudafood Putra Putri | Uni Charm vs. Mulia Boga Raya | Uni Charm vs. Ultra Jaya Milk |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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