Correlation Between CNVISION MEDIA and PT Indofood
Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA 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 CNVISION MEDIA and PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNVISION MEDIA and PT Indofood Sukses, you can compare the effects of market volatilities on CNVISION MEDIA 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 CNVISION MEDIA with a short position of PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and PT Indofood.
Diversification Opportunities for CNVISION MEDIA and PT Indofood
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CNVISION and ISM is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA i.e., CNVISION MEDIA and PT Indofood go up and down completely randomly.
Pair Corralation between CNVISION MEDIA and PT Indofood
Assuming the 90 days trading horizon CNVISION MEDIA is expected to under-perform the PT Indofood. But the stock apears to be less risky and, when comparing its historical volatility, CNVISION MEDIA is 1.58 times less risky than PT Indofood. The stock trades about 0.0 of its potential returns per unit of risk. The PT Indofood Sukses is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 35.00 in PT Indofood Sukses on August 29, 2024 and sell it today you would earn a total of 6.00 from holding PT Indofood Sukses or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNVISION MEDIA vs. PT Indofood Sukses
Performance |
| Timeline |
| CNVISION MEDIA |
| PT Indofood Sukses |
CNVISION MEDIA and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNVISION MEDIA and PT Indofood
The main advantage of trading using opposite CNVISION MEDIA and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA 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.| CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Superior Plus Corp | CNVISION MEDIA vs. SIVERS SEMICONDUCTORS AB |
| PT Indofood vs. Superior Plus Corp | PT Indofood vs. SIVERS SEMICONDUCTORS AB | PT Indofood vs. Talanx AG | PT Indofood vs. 2G ENERGY |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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