Correlation Between Widodo Makmur and Triputra Agro
Can any of the company-specific risk be diversified away by investing in both Widodo Makmur and Triputra Agro 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 Widodo Makmur and Triputra Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Widodo Makmur Unggas and Triputra Agro Persada, you can compare the effects of market volatilities on Widodo Makmur and Triputra Agro 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 Widodo Makmur with a short position of Triputra Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Widodo Makmur and Triputra Agro.
Diversification Opportunities for Widodo Makmur and Triputra Agro
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Widodo and Triputra is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Widodo Makmur Unggas and Triputra Agro Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triputra Agro Persada and Widodo Makmur 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 Widodo Makmur Unggas are associated (or correlated) with Triputra Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triputra Agro Persada has no effect on the direction of Widodo Makmur i.e., Widodo Makmur and Triputra Agro go up and down completely randomly.
Pair Corralation between Widodo Makmur and Triputra Agro
Assuming the 90 days trading horizon Widodo Makmur Unggas is expected to under-perform the Triputra Agro. In addition to that, Widodo Makmur is 3.31 times more volatile than Triputra Agro Persada. It trades about -0.09 of its total potential returns per unit of risk. Triputra Agro Persada is currently generating about -0.05 per unit of volatility. If you would invest 79,000 in Triputra Agro Persada on November 27, 2024 and sell it today you would lose (1,500) from holding Triputra Agro Persada or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Widodo Makmur Unggas vs. Triputra Agro Persada
Performance |
| Timeline |
| Widodo Makmur Unggas |
| Triputra Agro Persada |
Widodo Makmur and Triputra Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Widodo Makmur and Triputra Agro
The main advantage of trading using opposite Widodo Makmur and Triputra Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Widodo Makmur position performs unexpectedly, Triputra Agro 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 Triputra Agro will offset losses from the drop in Triputra Agro's long position.| Widodo Makmur vs. Triputra Agro Persada | Widodo Makmur vs. Aneka Gas Industri | Widodo Makmur vs. Saratoga Investama Sedaya | Widodo Makmur vs. Puradelta Lestari PT |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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