Correlation Between Alstria Office and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Alstria Office and PT Indofood 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 Alstria Office and PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between alstria office REIT AG and PT Indofood Sukses, you can compare the effects of market volatilities on Alstria Office and PT Indofood 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 Alstria Office with a short position of PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and PT Indofood.
Diversification Opportunities for Alstria Office and PT Indofood
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alstria and ISM is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and PT Indofood Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indofood Sukses and Alstria Office 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 alstria office REIT AG are associated (or correlated) with PT Indofood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indofood Sukses has no effect on the direction of Alstria Office i.e., Alstria Office and PT Indofood go up and down completely randomly.
Pair Corralation between Alstria Office and PT Indofood
Assuming the 90 days horizon alstria office REIT AG is expected to generate 0.68 times more return on investment than PT Indofood. However, alstria office REIT AG is 1.48 times less risky than PT Indofood. It trades about 0.04 of its potential returns per unit of risk. PT Indofood Sukses is currently generating about 0.03 per unit of risk. If you would invest 526.00 in alstria office REIT AG on September 25, 2024 and sell it today you would earn a total of 234.00 from holding alstria office REIT AG or generate 44.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
alstria office REIT AG vs. PT Indofood Sukses
Performance |
| Timeline |
| alstria office REIT |
| PT Indofood Sukses |
Alstria Office and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and PT Indofood
The main advantage of trading using opposite Alstria Office and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, PT Indofood 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 Indofood will offset losses from the drop in PT Indofood's long position.| Alstria Office vs. Materialise NV | Alstria Office vs. SANOK RUBBER ZY | Alstria Office vs. Sumitomo Rubber Industries | Alstria Office vs. Clean Energy Fuels |
| PT Indofood vs. Mowi ASA | PT Indofood vs. LEROY SEAFOOD GRUNSPADR | PT Indofood vs. Lery Seafood Group | PT Indofood vs. Nisshin Seifun Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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