Correlation Between Fast Food and Indosterling Technomedia
Can any of the company-specific risk be diversified away by investing in both Fast Food and Indosterling Technomedia 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 Indosterling Technomedia 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 Indosterling Technomedia Tbk, you can compare the effects of market volatilities on Fast Food and Indosterling Technomedia 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 Indosterling Technomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Food and Indosterling Technomedia.
Diversification Opportunities for Fast Food and Indosterling Technomedia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fast and Indosterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fast Food Indonesia and Indosterling Technomedia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosterling Technomedia 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 Indosterling Technomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosterling Technomedia has no effect on the direction of Fast Food i.e., Fast Food and Indosterling Technomedia go up and down completely randomly.
Pair Corralation between Fast Food and Indosterling Technomedia
Assuming the 90 days trading horizon Fast Food Indonesia is expected to generate 0.87 times more return on investment than Indosterling Technomedia. However, Fast Food Indonesia is 1.15 times less risky than Indosterling Technomedia. It trades about -0.07 of its potential returns per unit of risk. Indosterling Technomedia Tbk is currently generating about -0.33 per unit of risk. If you would invest 82,000 in Fast Food Indonesia on September 2, 2024 and sell it today you would lose (50,000) from holding Fast Food Indonesia or give up 60.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Fast Food Indonesia vs. Indosterling Technomedia Tbk
Performance |
| Timeline |
| Fast Food Indonesia |
| Indosterling Technomedia |
Fast Food and Indosterling Technomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Food and Indosterling Technomedia
The main advantage of trading using opposite Fast Food and Indosterling Technomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Food position performs unexpectedly, Indosterling Technomedia 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 Indosterling Technomedia will offset losses from the drop in Indosterling Technomedia'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 |
| Indosterling Technomedia vs. Multipolar Technology Tbk | Indosterling Technomedia vs. Digital Mediatama Maxima | Indosterling Technomedia vs. M Cash Integrasi | Indosterling Technomedia vs. NFC Indonesia PT |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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