Correlation Between Wilton Makmur and J Resources

Can any of the company-specific risk be diversified away by investing in both Wilton Makmur and J Resources 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 Wilton Makmur and J Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wilton Makmur Indonesia and J Resources Asia, you can compare the effects of market volatilities on Wilton Makmur and J Resources 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 Wilton Makmur with a short position of J Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilton Makmur and J Resources.

Diversification Opportunities for Wilton Makmur and J Resources

0.57

Correlation Coefficient

Wilton Makmur  J Resources

Very weak diversification

The 3 months correlation between Wilton and PSAB is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Wilton Makmur Indonesia and J Resources Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Resources Asia and Wilton 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 Wilton Makmur Indonesia are associated (or correlated) with J Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Resources Asia has no effect on the direction of Wilton Makmur i.e., Wilton Makmur and J Resources go up and down completely randomly.

Pair Corralation between Wilton Makmur and J Resources

Assuming the 90 days trading horizon Wilton Makmur Indonesia is expected to under-perform the J Resources. But the stock apears to be less risky and, when comparing its historical volatility, Wilton Makmur Indonesia is 1.25 times less risky than J Resources. The stock trades about -0.21 of its potential returns per unit of risk. The J Resources Asia is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  30,200  in J Resources Asia on December 1, 2024 and sell it today you would lose (4,800) from holding J Resources Asia or give up 15.89% of portfolio value over 90 days.

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

Wilton Makmur Indonesia  vs.  J Resources Asia

Wilton Makmur Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wilton Makmur Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

J Resources Asia

Risk-Adjusted Performance

Very Weak

Over the last 90 days J Resources Asia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Wilton Makmur and J Resources

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

The idea behind Wilton Makmur Indonesia and J Resources Asia 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.