Correlation Between Fast Food and Indoritel Makmur
Can any of the company-specific risk be diversified away by investing in both Fast Food and Indoritel Makmur 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 Fast Food and Indoritel Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Food Indonesia and Indoritel Makmur Internasional, you can compare the effects of market volatilities on Fast Food and Indoritel Makmur 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 Fast Food with a short position of Indoritel Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Food and Indoritel Makmur.
Diversification Opportunities for Fast Food and Indoritel Makmur
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fast and Indoritel is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fast Food Indonesia and Indoritel Makmur Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indoritel Makmur Int and Fast Food 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 Fast Food Indonesia are associated (or correlated) with Indoritel Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indoritel Makmur Int has no effect on the direction of Fast Food i.e., Fast Food and Indoritel Makmur go up and down completely randomly.
Pair Corralation between Fast Food and Indoritel Makmur
Assuming the 90 days trading horizon Fast Food Indonesia is expected to under-perform the Indoritel Makmur. In addition to that, Fast Food is 1.36 times more volatile than Indoritel Makmur Internasional. It trades about -0.14 of its total potential returns per unit of risk. Indoritel Makmur Internasional is currently generating about 0.09 per unit of volatility. If you would invest 915,000 in Indoritel Makmur Internasional on November 27, 2024 and sell it today you would earn a total of 35,000 from holding Indoritel Makmur Internasional or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Food Indonesia vs. Indoritel Makmur Internasional
Performance |
| Timeline |
| Fast Food Indonesia |
| Indoritel Makmur Int |
Fast Food and Indoritel Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Food and Indoritel Makmur
The main advantage of trading using opposite Fast Food and Indoritel Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Food position performs unexpectedly, Indoritel Makmur 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 Indoritel Makmur will offset losses from the drop in Indoritel Makmur's long position.| Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Indoritel Makmur Internasional | Fast Food vs. Enseval Putra Megatrading | Fast Food vs. Fks Multi Agro |
| Indoritel Makmur vs. Fast Food Indonesia | Indoritel Makmur vs. Centratama Telekomunikasi Ind | Indoritel Makmur vs. Sumber Alfaria Trijaya | Indoritel Makmur vs. Bayu Buana Tbk |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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