Correlation Between WIMFARM SA and Perusahaan Perseroan

Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and Perusahaan Perseroan 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 WIMFARM SA and Perusahaan Perseroan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WIMFARM SA EO and Perusahaan Perseroan PT, you can compare the effects of market volatilities on WIMFARM SA and Perusahaan Perseroan 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 WIMFARM SA with a short position of Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and Perusahaan Perseroan.

Diversification Opportunities for WIMFARM SA and Perusahaan Perseroan

0.21

Correlation Coefficient

WIMFARM SA  Perusahaan Perseroan

Modest diversification

The 3 months correlation between WIMFARM and Perusahaan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan and WIMFARM SA 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 WIMFARM SA EO are associated (or correlated) with Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and Perusahaan Perseroan go up and down completely randomly.

Pair Corralation between WIMFARM SA and Perusahaan Perseroan

Assuming the 90 days horizon WIMFARM SA EO is expected to under-perform the Perusahaan Perseroan. In addition to that, WIMFARM SA is 2.08 times more volatile than Perusahaan Perseroan PT. It trades about -0.06 of its total potential returns per unit of risk. Perusahaan Perseroan PT is currently generating about -0.02 per unit of volatility. If you would invest  2,097  in Perusahaan Perseroan PT on October 24, 2024 and sell it today you would lose (497.00) from holding Perusahaan Perseroan PT or give up 23.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

WIMFARM SA EO  vs.  Perusahaan Perseroan PT

WIMFARM SA EO

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WIMFARM SA EO are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WIMFARM SA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Perusahaan Perseroan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Perusahaan Perseroan is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with WIMFARM SA and Perusahaan Perseroan

The main advantage of trading using opposite WIMFARM SA and Perusahaan Perseroan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, Perusahaan Perseroan 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 Perusahaan Perseroan will offset losses from the drop in Perusahaan Perseroan's long position.

The idea behind WIMFARM SA EO and Perusahaan Perseroan PT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.