Correlation Between COFCO Joycome and PT Bank
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and PT Bank 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 COFCO Joycome and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and PT Bank Mandiri, you can compare the effects of market volatilities on COFCO Joycome and PT Bank 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 COFCO Joycome with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and PT Bank.
Diversification Opportunities for COFCO Joycome and PT Bank
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COFCO and PQ9 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and PT Bank Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Mandiri and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Mandiri has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and PT Bank go up and down completely randomly.
Pair Corralation between COFCO Joycome and PT Bank
Assuming the 90 days horizon COFCO Joycome is expected to generate 1.95 times less return on investment than PT Bank. But when comparing it to its historical volatility, COFCO Joycome Foods is 2.19 times less risky than PT Bank. It trades about 0.01 of its potential returns per unit of risk. PT Bank Mandiri is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 35.00 in PT Bank Mandiri on October 30, 2024 and sell it today you would lose (1.00) from holding PT Bank Mandiri or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. PT Bank Mandiri
Performance |
| Timeline |
| COFCO Joycome Foods |
| PT Bank Mandiri |
COFCO Joycome and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and PT Bank
The main advantage of trading using opposite COFCO Joycome and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| COFCO Joycome vs. General Mills | COFCO Joycome vs. Danone SA | COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Kellogg Company |
| PT Bank vs. HYATT HOTELS A | PT Bank vs. Erste Group Bank | PT Bank vs. CHIBA BANK | PT Bank vs. SUN LIFE FINANCIAL |
Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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