Correlation Between Hisense Home and INDOFOOD AGRI
Can any of the company-specific risk be diversified away by investing in both Hisense Home 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 Hisense Home and INDOFOOD AGRI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hisense Home Appliances and INDOFOOD AGRI RES, you can compare the effects of market volatilities on Hisense Home 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 Hisense Home with a short position of INDOFOOD AGRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hisense Home and INDOFOOD AGRI.
Diversification Opportunities for Hisense Home and INDOFOOD AGRI
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hisense and INDOFOOD is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances 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 Hisense Home 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 Hisense Home Appliances 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 Hisense Home i.e., Hisense Home and INDOFOOD AGRI go up and down completely randomly.
Pair Corralation between Hisense Home and INDOFOOD AGRI
If you would invest 287.00 in Hisense Home Appliances on September 19, 2024 and sell it today you would earn a total of 2.00 from holding Hisense Home Appliances or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hisense Home Appliances vs. INDOFOOD AGRI RES
Performance |
| Timeline |
| Hisense Home Appliances |
| INDOFOOD AGRI RES |
Hisense Home and INDOFOOD AGRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hisense Home and INDOFOOD AGRI
The main advantage of trading using opposite Hisense Home and INDOFOOD AGRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home 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.| Hisense Home vs. INDOFOOD AGRI RES | Hisense Home vs. Tyson Foods | Hisense Home vs. ANTA SPORTS PRODUCT | Hisense Home vs. Charoen Pokphand Foods |
| INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Apple Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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