Correlation Between G III and INDOFOOD AGRI
Can any of the company-specific risk be diversified away by investing in both G III 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 G III and INDOFOOD AGRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G III Apparel Group and INDOFOOD AGRI RES, you can compare the effects of market volatilities on G III 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 G III with a short position of INDOFOOD AGRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and INDOFOOD AGRI.
Diversification Opportunities for G III and INDOFOOD AGRI
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GI4 and INDOFOOD is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group 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 G III 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 G III Apparel Group 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 G III i.e., G III and INDOFOOD AGRI go up and down completely randomly.
Pair Corralation between G III and INDOFOOD AGRI
Assuming the 90 days trading horizon G III Apparel Group is expected to under-perform the INDOFOOD AGRI. But the stock apears to be less risky and, when comparing its historical volatility, G III Apparel Group is 1.22 times less risky than INDOFOOD AGRI. The stock trades about -0.24 of its potential returns per unit of risk. The INDOFOOD AGRI RES is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 22.00 in INDOFOOD AGRI RES on November 27, 2024 and sell it today you would lose (2.00) from holding INDOFOOD AGRI RES or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. INDOFOOD AGRI RES
Performance |
| Timeline |
| G III Apparel |
| INDOFOOD AGRI RES |
G III and INDOFOOD AGRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and INDOFOOD AGRI
The main advantage of trading using opposite G III and INDOFOOD AGRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III 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.| G III vs. Gol Intelligent Airlines | G III vs. Singapore Airlines Limited | G III vs. Algonquin Power Utilities | G III vs. Dentsply Sirona |
| INDOFOOD AGRI vs. THAI BEVERAGE | INDOFOOD AGRI vs. BIOPHARMA CREDIT DL | INDOFOOD AGRI vs. Carnegie Clean Energy | INDOFOOD AGRI vs. Discover Financial Services |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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