Correlation Between Cipta Selera and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Cipta Selera 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 Cipta Selera and PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cipta Selera Murni and PT Indofood Sukses, you can compare the effects of market volatilities on Cipta Selera 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 Cipta Selera with a short position of PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cipta Selera and PT Indofood.
Diversification Opportunities for Cipta Selera and PT Indofood
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cipta and INDF is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cipta Selera Murni 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 Cipta Selera 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 Cipta Selera Murni 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 Cipta Selera i.e., Cipta Selera and PT Indofood go up and down completely randomly.
Pair Corralation between Cipta Selera and PT Indofood
Assuming the 90 days trading horizon Cipta Selera is expected to generate 117.5 times less return on investment than PT Indofood. In addition to that, Cipta Selera is 1.01 times more volatile than PT Indofood Sukses. It trades about 0.0 of its total potential returns per unit of risk. PT Indofood Sukses is currently generating about 0.03 per unit of volatility. If you would invest 639,818 in PT Indofood Sukses on August 30, 2024 and sell it today you would earn a total of 125,182 from holding PT Indofood Sukses or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Cipta Selera Murni vs. PT Indofood Sukses
Performance |
| Timeline |
| Cipta Selera Murni |
| PT Indofood Sukses |
Cipta Selera and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cipta Selera and PT Indofood
The main advantage of trading using opposite Cipta Selera and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipta Selera 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.| Cipta Selera vs. Era Media Sejahtera | Cipta Selera vs. Dharma Polimetal Tbk | Cipta Selera vs. Mahaka Media Tbk | Cipta Selera vs. Lippo General Insurance |
| PT Indofood vs. Astra International Tbk | PT Indofood vs. Unilever Indonesia Tbk | PT Indofood vs. Telkom Indonesia Tbk | PT Indofood vs. Bank Mandiri Persero |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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