Correlation Between Braskem SA and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Braskem SA 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 Braskem SA and PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braskem SA Class and PT Indofood Sukses, you can compare the effects of market volatilities on Braskem SA 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 Braskem SA with a short position of PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braskem SA and PT Indofood.
Diversification Opportunities for Braskem SA and PT Indofood
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Braskem and PIFMF is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Braskem SA Class 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 Braskem SA 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 Braskem SA Class 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 Braskem SA i.e., Braskem SA and PT Indofood go up and down completely randomly.
Pair Corralation between Braskem SA and PT Indofood
If you would invest 39.00 in PT Indofood Sukses on September 3, 2024 and sell it today you would earn a total of 0.00 from holding PT Indofood Sukses or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 5.0% |
| Values | Daily Returns |
Braskem SA Class vs. PT Indofood Sukses
Performance |
| Timeline |
| Braskem SA Class |
| PT Indofood Sukses |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Braskem SA and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braskem SA and PT Indofood
The main advantage of trading using opposite Braskem SA and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braskem SA 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.| Braskem SA vs. Valhi Inc | Braskem SA vs. Huntsman | Braskem SA vs. Lsb Industries | Braskem SA vs. Westlake Chemical Partners |
| PT Indofood vs. Aptiv PLC | PT Indofood vs. Sun Life Financial | PT Indofood vs. Aegon NV ADR | PT Indofood vs. Dana Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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