Correlation Between Widodo Makmur and Damai Sejahtera
Can any of the company-specific risk be diversified away by investing in both Widodo Makmur and Damai Sejahtera 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 Damai Sejahtera 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 Damai Sejahtera Abadi, you can compare the effects of market volatilities on Widodo Makmur and Damai Sejahtera 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 Damai Sejahtera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Widodo Makmur and Damai Sejahtera.
Diversification Opportunities for Widodo Makmur and Damai Sejahtera
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Widodo and Damai is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Widodo Makmur Unggas and Damai Sejahtera Abadi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damai Sejahtera Abadi 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 Damai Sejahtera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Damai Sejahtera Abadi has no effect on the direction of Widodo Makmur i.e., Widodo Makmur and Damai Sejahtera go up and down completely randomly.
Pair Corralation between Widodo Makmur and Damai Sejahtera
Assuming the 90 days trading horizon Widodo Makmur is expected to generate 3.11 times less return on investment than Damai Sejahtera. In addition to that, Widodo Makmur is 1.99 times more volatile than Damai Sejahtera Abadi. It trades about 0.03 of its total potential returns per unit of risk. Damai Sejahtera Abadi is currently generating about 0.18 per unit of volatility. If you would invest 27,600 in Damai Sejahtera Abadi on September 1, 2024 and sell it today you would earn a total of 3,200 from holding Damai Sejahtera Abadi or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Widodo Makmur Unggas vs. Damai Sejahtera Abadi
Performance |
| Timeline |
| Widodo Makmur Unggas |
| Damai Sejahtera Abadi |
Widodo Makmur and Damai Sejahtera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Widodo Makmur and Damai Sejahtera
The main advantage of trading using opposite Widodo Makmur and Damai Sejahtera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Widodo Makmur position performs unexpectedly, Damai Sejahtera 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 Damai Sejahtera will offset losses from the drop in Damai Sejahtera'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 |
| Damai Sejahtera vs. PT Sunter Lakeside | Damai Sejahtera vs. Trisula Textile Industries | Damai Sejahtera vs. Diagnos Laboratorium Utama | Damai Sejahtera vs. Bank Net Indonesia |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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