Correlation Between Wilmar International and Minerva SA
Can any of the company-specific risk be diversified away by investing in both Wilmar International and Minerva SA 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 Minerva SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilmar International and Minerva SA, you can compare the effects of market volatilities on Wilmar International and Minerva SA 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 Minerva SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmar International and Minerva SA.
Diversification Opportunities for Wilmar International and Minerva SA
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wilmar and Minerva is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Wilmar International and Minerva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerva SA 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 Minerva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerva SA has no effect on the direction of Wilmar International i.e., Wilmar International and Minerva SA go up and down completely randomly.
Pair Corralation between Wilmar International and Minerva SA
Assuming the 90 days horizon Wilmar International is expected to generate 0.34 times more return on investment than Minerva SA. However, Wilmar International is 2.91 times less risky than Minerva SA. It trades about -0.02 of its potential returns per unit of risk. Minerva SA is currently generating about -0.02 per unit of risk. If you would invest 2,800 in Wilmar International on September 12, 2024 and sell it today you would lose (513.00) from holding Wilmar International or give up 18.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.57% |
| Values | Daily Returns |
Wilmar International vs. Minerva SA
Performance |
| Timeline |
| Wilmar International |
| Minerva SA |
Wilmar International and Minerva SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmar International and Minerva SA
The main advantage of trading using opposite Wilmar International and Minerva SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmar International position performs unexpectedly, Minerva SA 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 Minerva SA will offset losses from the drop in Minerva SA's long position.| Wilmar International vs. Wilmar International Limited | Wilmar International vs. Wesfarmers Ltd ADR | Wilmar International vs. United Overseas Bank | Wilmar International vs. Kerry Group PLC |
| Minerva SA vs. Golden Agri Resources | Minerva SA vs. SalMar ASA | Minerva SA vs. Wilmar International | Minerva SA vs. Brasilagro Adr |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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