Correlation Between Indoritel Makmur and Fast Food
Can any of the company-specific risk be diversified away by investing in both Indoritel Makmur 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 Indoritel Makmur and Fast Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indoritel Makmur Internasional and Fast Food Indonesia, you can compare the effects of market volatilities on Indoritel Makmur 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 Indoritel Makmur with a short position of Fast Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indoritel Makmur and Fast Food.
Diversification Opportunities for Indoritel Makmur and Fast Food
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indoritel and Fast is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Indoritel Makmur Internasional 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 Indoritel Makmur 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 Indoritel Makmur Internasional 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 Indoritel Makmur i.e., Indoritel Makmur and Fast Food go up and down completely randomly.
Pair Corralation between Indoritel Makmur and Fast Food
Assuming the 90 days trading horizon Indoritel Makmur Internasional is expected to generate 0.23 times more return on investment than Fast Food. However, Indoritel Makmur Internasional is 4.43 times less risky than Fast Food. It trades about 0.11 of its potential returns per unit of risk. Fast Food Indonesia is currently generating about -0.02 per unit of risk. If you would invest 900,000 in Indoritel Makmur Internasional on November 3, 2024 and sell it today you would earn a total of 20,000 from holding Indoritel Makmur Internasional or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indoritel Makmur Internasional vs. Fast Food Indonesia
Performance |
| Timeline |
| Indoritel Makmur Int |
| Fast Food Indonesia |
Indoritel Makmur and Fast Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indoritel Makmur and Fast Food
The main advantage of trading using opposite Indoritel Makmur and Fast Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indoritel Makmur 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.| Indoritel Makmur vs. Fast Food Indonesia | Indoritel Makmur vs. Centratama Telekomunikasi Ind | Indoritel Makmur vs. Sumber Alfaria Trijaya | Indoritel Makmur vs. Bayu Buana Tbk |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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