Correlation Between Nasdaq and Wilmar Cahaya

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Can any of the company-specific risk be diversified away by investing in both Nasdaq and Wilmar Cahaya 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 Nasdaq and Wilmar Cahaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Wilmar Cahaya Indonesia, you can compare the effects of market volatilities on Nasdaq and Wilmar Cahaya 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 Nasdaq with a short position of Wilmar Cahaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Wilmar Cahaya.

Diversification Opportunities for Nasdaq and Wilmar Cahaya

NasdaqWilmarDiversified AwayNasdaqWilmarDiversified Away100%
-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between Nasdaq and Wilmar is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Wilmar Cahaya Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar Cahaya Indonesia and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Wilmar Cahaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar Cahaya Indonesia has no effect on the direction of Nasdaq i.e., Nasdaq and Wilmar Cahaya go up and down completely randomly.

Pair Corralation between Nasdaq and Wilmar Cahaya

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.76 times more return on investment than Wilmar Cahaya. However, Nasdaq Inc is 1.32 times less risky than Wilmar Cahaya. It trades about 0.01 of its potential returns per unit of risk. Wilmar Cahaya Indonesia is currently generating about 0.01 per unit of risk. If you would invest  7,954  in Nasdaq Inc on September 19, 2024 and sell it today you would earn a total of  7.00  from holding Nasdaq Inc or generate 0.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Nasdaq Inc  vs.  Wilmar Cahaya Indonesia

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0510
JavaScript chart by amCharts 3.21.15NDAQ CEKA
       Timeline  
Nasdaq Inc 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec72747678808284
Wilmar Cahaya Indonesia 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Wilmar Cahaya Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Wilmar Cahaya is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2,0002,0502,1002,1502,2002,250

Nasdaq and Wilmar Cahaya Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.03-2.27-1.51-0.750.00.791.62.413.234.04 0.10.20.30.4
JavaScript chart by amCharts 3.21.15NDAQ CEKA
       Returns  

Pair Trading with Nasdaq and Wilmar Cahaya

The main advantage of trading using opposite Nasdaq and Wilmar Cahaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Wilmar Cahaya 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 Cahaya will offset losses from the drop in Wilmar Cahaya's long position.
The idea behind Nasdaq Inc and Wilmar Cahaya 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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