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

-0.23

Correlation Coefficient

Widodo Makmur  Damai Sejahtera

Very good diversification

The 3 months correlation between Widodo and Damai is -0.23. 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 222.56 times less return on investment than Damai Sejahtera. In addition to that, Widodo Makmur is 2.03 times more volatile than Damai Sejahtera Abadi. It trades about 0.0 of its total potential returns per unit of risk. Damai Sejahtera Abadi is currently generating about 0.13 per unit of volatility. If you would invest  21,626  in Damai Sejahtera Abadi on September 13, 2024 and sell it today you would earn a total of  4,774  from holding Damai Sejahtera Abadi or generate 22.08% 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

Widodo Makmur Unggas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Widodo Makmur Unggas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Widodo Makmur is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Damai Sejahtera Abadi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Damai Sejahtera Abadi are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Damai Sejahtera disclosed solid returns over the last few months and may actually be approaching a breakup point.

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.

The idea behind Widodo Makmur Unggas and Damai Sejahtera Abadi 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.