Correlation Between Garudafood Putra and Indofood Cbp
Can any of the company-specific risk be diversified away by investing in both Garudafood Putra and Indofood Cbp 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 Garudafood Putra and Indofood Cbp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garudafood Putra Putri and Indofood Cbp Sukses, you can compare the effects of market volatilities on Garudafood Putra and Indofood Cbp 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 Garudafood Putra with a short position of Indofood Cbp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garudafood Putra and Indofood Cbp.
Diversification Opportunities for Garudafood Putra and Indofood Cbp
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Garudafood and Indofood is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Garudafood Putra Putri and Indofood Cbp Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indofood Cbp Sukses and Garudafood Putra 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 Garudafood Putra Putri are associated (or correlated) with Indofood Cbp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indofood Cbp Sukses has no effect on the direction of Garudafood Putra i.e., Garudafood Putra and Indofood Cbp go up and down completely randomly.
Pair Corralation between Garudafood Putra and Indofood Cbp
Assuming the 90 days trading horizon Garudafood Putra Putri is expected to under-perform the Indofood Cbp. But the stock apears to be less risky and, when comparing its historical volatility, Garudafood Putra Putri is 1.26 times less risky than Indofood Cbp. The stock trades about 0.0 of its potential returns per unit of risk. The Indofood Cbp Sukses is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,044,519 in Indofood Cbp Sukses on September 2, 2024 and sell it today you would earn a total of 145,481 from holding Indofood Cbp Sukses or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garudafood Putra Putri vs. Indofood Cbp Sukses
Performance |
| Timeline |
| Garudafood Putra Putri |
| Indofood Cbp Sukses |
Garudafood Putra and Indofood Cbp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garudafood Putra and Indofood Cbp
The main advantage of trading using opposite Garudafood Putra and Indofood Cbp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garudafood Putra position performs unexpectedly, Indofood Cbp 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 Cbp will offset losses from the drop in Indofood Cbp's long position.| Garudafood Putra vs. Bank BRISyariah Tbk | Garudafood Putra vs. Mitra Pinasthika Mustika | Garudafood Putra vs. Jakarta Int Hotels | Garudafood Putra vs. Indosterling Technomedia Tbk |
| Indofood Cbp vs. Unilever Indonesia Tbk | Indofood Cbp vs. PT Indofood Sukses | Indofood Cbp vs. Astra International Tbk | Indofood Cbp vs. Telkom Indonesia 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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