Correlation Between Compagnie Plastic and INDOFOOD AGRI
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and INDOFOOD AGRI 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 Compagnie Plastic and INDOFOOD AGRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and INDOFOOD AGRI RES, you can compare the effects of market volatilities on Compagnie Plastic and INDOFOOD AGRI 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 Compagnie Plastic with a short position of INDOFOOD AGRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and INDOFOOD AGRI.
Diversification Opportunities for Compagnie Plastic and INDOFOOD AGRI
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and INDOFOOD is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and INDOFOOD AGRI RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDOFOOD AGRI RES and Compagnie Plastic 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 Compagnie Plastic Omnium are associated (or correlated) with INDOFOOD AGRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDOFOOD AGRI RES has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and INDOFOOD AGRI go up and down completely randomly.
Pair Corralation between Compagnie Plastic and INDOFOOD AGRI
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to generate 1.93 times more return on investment than INDOFOOD AGRI. However, Compagnie Plastic is 1.93 times more volatile than INDOFOOD AGRI RES. It trades about 0.18 of its potential returns per unit of risk. INDOFOOD AGRI RES is currently generating about -0.08 per unit of risk. If you would invest 899.00 in Compagnie Plastic Omnium on October 12, 2024 and sell it today you would earn a total of 153.00 from holding Compagnie Plastic Omnium or generate 17.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. INDOFOOD AGRI RES
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| INDOFOOD AGRI RES |
Compagnie Plastic and INDOFOOD AGRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and INDOFOOD AGRI
The main advantage of trading using opposite Compagnie Plastic and INDOFOOD AGRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, INDOFOOD AGRI 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 INDOFOOD AGRI will offset losses from the drop in INDOFOOD AGRI's long position.| Compagnie Plastic vs. Strategic Education | Compagnie Plastic vs. Siamgas And Petrochemicals | Compagnie Plastic vs. betterU Education Corp | Compagnie Plastic vs. INDO RAMA SYNTHETIC |
| INDOFOOD AGRI vs. ONWARD MEDICAL BV | INDOFOOD AGRI vs. Diamyd Medical AB | INDOFOOD AGRI vs. Compagnie Plastic Omnium | INDOFOOD AGRI vs. Advanced Medical Solutions |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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