Correlation Between Archer Daniels and Wilmar International

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

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

Diversification Opportunities for Archer Daniels and Wilmar International

-0.48

Correlation Coefficient

Archer Daniels  Wilmar International

Very good diversification

The 3 months correlation between Archer and Wilmar is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Archer Daniels Midland and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International and Archer Daniels 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 Archer Daniels Midland 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 Archer Daniels i.e., Archer Daniels and Wilmar International go up and down completely randomly.

Pair Corralation between Archer Daniels and Wilmar International

Assuming the 90 days horizon Archer Daniels Midland is expected to generate 1.02 times more return on investment than Wilmar International. However, Archer Daniels is 1.02 times more volatile than Wilmar International Limited. It trades about 0.07 of its potential returns per unit of risk. Wilmar International Limited is currently generating about -0.04 per unit of risk. If you would invest  4,236  in Archer Daniels Midland on April 24, 2025 and sell it today you would earn a total of  379.00  from holding Archer Daniels Midland or generate 8.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Archer Daniels Midland  vs.  Wilmar International Limited

Archer Daniels Midland

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Archer Daniels Midland are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Archer Daniels may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Wilmar International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wilmar International Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Wilmar International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Archer Daniels and Wilmar International

The main advantage of trading using opposite Archer Daniels and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Daniels 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 Archer Daniels Midland and Wilmar International Limited 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.