Correlation Between Colorpak Indonesia and Fast Food
Can any of the company-specific risk be diversified away by investing in both Colorpak Indonesia and Fast Food 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 Colorpak Indonesia and Fast Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colorpak Indonesia Tbk and Fast Food Indonesia, you can compare the effects of market volatilities on Colorpak Indonesia and Fast Food 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 Colorpak Indonesia with a short position of Fast Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colorpak Indonesia and Fast Food.
Diversification Opportunities for Colorpak Indonesia and Fast Food
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Colorpak and Fast is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Colorpak Indonesia Tbk and Fast Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Food Indonesia and Colorpak Indonesia 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 Colorpak Indonesia Tbk are associated (or correlated) with Fast Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Food Indonesia has no effect on the direction of Colorpak Indonesia i.e., Colorpak Indonesia and Fast Food go up and down completely randomly.
Pair Corralation between Colorpak Indonesia and Fast Food
Assuming the 90 days trading horizon Colorpak Indonesia Tbk is expected to generate 0.35 times more return on investment than Fast Food. However, Colorpak Indonesia Tbk is 2.9 times less risky than Fast Food. It trades about 0.08 of its potential returns per unit of risk. Fast Food Indonesia is currently generating about -0.07 per unit of risk. If you would invest 79,541 in Colorpak Indonesia Tbk on August 29, 2024 and sell it today you would earn a total of 25,459 from holding Colorpak Indonesia Tbk or generate 32.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Colorpak Indonesia Tbk vs. Fast Food Indonesia
Performance |
| Timeline |
| Colorpak Indonesia Tbk |
| Fast Food Indonesia |
Colorpak Indonesia and Fast Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colorpak Indonesia and Fast Food
The main advantage of trading using opposite Colorpak Indonesia and Fast Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colorpak Indonesia position performs unexpectedly, Fast Food 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 Fast Food will offset losses from the drop in Fast Food's long position.| Colorpak Indonesia vs. Ekadharma International Tbk | Colorpak Indonesia vs. Enseval Putra Megatrading | Colorpak Indonesia vs. Duta Pertiwi Nusantara | Colorpak Indonesia vs. Wilmar Cahaya Indonesia |
| Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Indoritel Makmur Internasional | Fast Food vs. Enseval Putra Megatrading | Fast Food vs. Fks Multi Agro |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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