Correlation Between Astra Agro and Wilmar International

Can any of the company-specific risk be diversified away by investing in both Astra Agro and Wilmar International 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 Astra Agro and Wilmar International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astra Agro Lestari and Wilmar International, you can compare the effects of market volatilities on Astra Agro and Wilmar International 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 Astra Agro with a short position of Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Agro and Wilmar International.

Diversification Opportunities for Astra Agro and Wilmar International

0.0

Correlation Coefficient

Astra Agro  Wilmar International

Pay attention - limited upside

The 3 months correlation between Astra and Wilmar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astra Agro Lestari and Wilmar International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International and Astra Agro 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 Astra Agro Lestari are associated (or correlated) with Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Astra Agro i.e., Astra Agro and Wilmar International go up and down completely randomly.

Pair Corralation between Astra Agro and Wilmar International

If you would invest  2,218  in Wilmar International on December 20, 2024 and sell it today you would earn a total of  251.00  from holding Wilmar International or generate 11.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Astra Agro Lestari  vs.  Wilmar International

Astra Agro Lestari

Risk-Adjusted Performance

Very Weak

Over the last 90 days Astra Agro Lestari has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Astra Agro is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Wilmar International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wilmar International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward indicators, Wilmar International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Astra Agro and Wilmar International

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

The idea behind Astra Agro Lestari and Wilmar International 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.