Correlation Between Wilmar International and Forafric Global
Can any of the company-specific risk be diversified away by investing in both Wilmar International and Forafric Global 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 Wilmar International and Forafric Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilmar International and Forafric Global PLC, you can compare the effects of market volatilities on Wilmar International and Forafric Global 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 Wilmar International with a short position of Forafric Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmar International and Forafric Global.
Diversification Opportunities for Wilmar International and Forafric Global
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wilmar and Forafric is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Wilmar International and Forafric Global PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forafric Global PLC and Wilmar International 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 Wilmar International are associated (or correlated) with Forafric Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forafric Global PLC has no effect on the direction of Wilmar International i.e., Wilmar International and Forafric Global go up and down completely randomly.
Pair Corralation between Wilmar International and Forafric Global
Assuming the 90 days horizon Wilmar International is expected to generate 0.13 times more return on investment than Forafric Global. However, Wilmar International is 7.83 times less risky than Forafric Global. It trades about 0.1 of its potential returns per unit of risk. Forafric Global PLC is currently generating about -0.1 per unit of risk. If you would invest 2,270 in Wilmar International on November 4, 2024 and sell it today you would earn a total of 65.00 from holding Wilmar International or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Wilmar International vs. Forafric Global PLC
Performance |
| Timeline |
| Wilmar International |
| Forafric Global PLC |
Wilmar International and Forafric Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmar International and Forafric Global
The main advantage of trading using opposite Wilmar International and Forafric Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmar International position performs unexpectedly, Forafric Global 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 Forafric Global will offset losses from the drop in Forafric Global's long position.| Wilmar International vs. Wesfarmers Ltd ADR | Wilmar International vs. United Overseas Bank | Wilmar International vs. Kerry Group PLC | Wilmar International vs. Overseas Chinese Banking |
| Forafric Global vs. Forafric Global PLC | Forafric Global vs. Reservoir Media Management | Forafric Global vs. Arbe Robotics Ltd | Forafric Global vs. ADS TEC ENERGY PLC |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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