Correlation Between Voksel Electric and Wilton Makmur

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

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

Diversification Opportunities for Voksel Electric and Wilton Makmur

0.47

Correlation Coefficient

Voksel Electric  Wilton Makmur

Very weak diversification

The 3 months correlation between Voksel and Wilton is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Voksel Electric Tbk and Wilton Makmur Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilton Makmur Indonesia and Voksel Electric 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 Voksel Electric Tbk are associated (or correlated) with Wilton Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilton Makmur Indonesia has no effect on the direction of Voksel Electric i.e., Voksel Electric and Wilton Makmur go up and down completely randomly.

Pair Corralation between Voksel Electric and Wilton Makmur

Assuming the 90 days trading horizon Voksel Electric Tbk is expected to generate 0.94 times more return on investment than Wilton Makmur. However, Voksel Electric Tbk is 1.06 times less risky than Wilton Makmur. It trades about -0.03 of its potential returns per unit of risk. Wilton Makmur Indonesia is currently generating about -0.1 per unit of risk. If you would invest  23,000  in Voksel Electric Tbk on December 28, 2024 and sell it today you would lose (2,800) from holding Voksel Electric Tbk or give up 12.17% of portfolio value over 90 days.

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

Voksel Electric Tbk  vs.  Wilton Makmur Indonesia

Voksel Electric Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voksel Electric Tbk 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.

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.

Pair Trading with Voksel Electric and Wilton Makmur

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

The idea behind Voksel Electric Tbk and Wilton Makmur Indonesia 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.