Correlation Between Ambea AB and INDOFOOD AGRI
Can any of the company-specific risk be diversified away by investing in both Ambea AB 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 Ambea AB and INDOFOOD AGRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambea AB and INDOFOOD AGRI RES, you can compare the effects of market volatilities on Ambea AB 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 Ambea AB with a short position of INDOFOOD AGRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambea AB and INDOFOOD AGRI.
Diversification Opportunities for Ambea AB and INDOFOOD AGRI
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ambea and INDOFOOD is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ambea AB 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 Ambea AB 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 Ambea AB 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 Ambea AB i.e., Ambea AB and INDOFOOD AGRI go up and down completely randomly.
Pair Corralation between Ambea AB and INDOFOOD AGRI
Assuming the 90 days horizon Ambea AB is expected to generate 1.31 times more return on investment than INDOFOOD AGRI. However, Ambea AB is 1.31 times more volatile than INDOFOOD AGRI RES. It trades about 0.14 of its potential returns per unit of risk. INDOFOOD AGRI RES is currently generating about 0.03 per unit of risk. If you would invest 284.00 in Ambea AB on September 14, 2024 and sell it today you would earn a total of 564.00 from holding Ambea AB or generate 198.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Ambea AB vs. INDOFOOD AGRI RES
Performance |
| Timeline |
| Ambea AB |
| INDOFOOD AGRI RES |
Ambea AB and INDOFOOD AGRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambea AB and INDOFOOD AGRI
The main advantage of trading using opposite Ambea AB and INDOFOOD AGRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambea AB 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.| Ambea AB vs. INDOFOOD AGRI RES | Ambea AB vs. TRAVEL LEISURE DL 01 | Ambea AB vs. USWE SPORTS AB | Ambea AB vs. CN MODERN DAIRY |
| INDOFOOD AGRI vs. REGAL ASIAN INVESTMENTS | INDOFOOD AGRI vs. Chuangs China Investments | INDOFOOD AGRI vs. ECHO INVESTMENT ZY | INDOFOOD AGRI vs. Apollo Investment Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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