Correlation Between SILVER BULLET and INDOFOOD AGRI
Can any of the company-specific risk be diversified away by investing in both SILVER BULLET and INDOFOOD AGRI 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 SILVER BULLET and INDOFOOD AGRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SILVER BULLET DATA and INDOFOOD AGRI RES, you can compare the effects of market volatilities on SILVER BULLET and INDOFOOD AGRI 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 SILVER BULLET with a short position of INDOFOOD AGRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SILVER BULLET and INDOFOOD AGRI.
Diversification Opportunities for SILVER BULLET and INDOFOOD AGRI
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between SILVER and INDOFOOD is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SILVER BULLET DATA and INDOFOOD AGRI RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDOFOOD AGRI RES and SILVER BULLET 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 SILVER BULLET DATA are associated (or correlated) with INDOFOOD AGRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDOFOOD AGRI RES has no effect on the direction of SILVER BULLET i.e., SILVER BULLET and INDOFOOD AGRI go up and down completely randomly.
Pair Corralation between SILVER BULLET and INDOFOOD AGRI
Assuming the 90 days horizon SILVER BULLET DATA is expected to under-perform the INDOFOOD AGRI. But the stock apears to be less risky and, when comparing its historical volatility, SILVER BULLET DATA is 1.72 times less risky than INDOFOOD AGRI. The stock trades about -0.36 of its potential returns per unit of risk. The INDOFOOD AGRI RES is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 22.00 in INDOFOOD AGRI RES on November 6, 2024 and sell it today you would lose (1.00) from holding INDOFOOD AGRI RES or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SILVER BULLET DATA vs. INDOFOOD AGRI RES
Performance |
| Timeline |
| SILVER BULLET DATA |
| INDOFOOD AGRI RES |
SILVER BULLET and INDOFOOD AGRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SILVER BULLET and INDOFOOD AGRI
The main advantage of trading using opposite SILVER BULLET and INDOFOOD AGRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SILVER BULLET position performs unexpectedly, INDOFOOD AGRI 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 INDOFOOD AGRI will offset losses from the drop in INDOFOOD AGRI's long position.| SILVER BULLET vs. SLR Investment Corp | SILVER BULLET vs. Apollo Investment Corp | SILVER BULLET vs. PennyMac Mortgage Investment | SILVER BULLET vs. SBI Insurance Group |
| INDOFOOD AGRI vs. Algonquin Power Utilities | INDOFOOD AGRI vs. PLAYTIKA HOLDING DL 01 | INDOFOOD AGRI vs. Playtech plc | INDOFOOD AGRI vs. Columbia Sportswear |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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