Correlation Between Indofood Cbp and Arthavest Tbk
Can any of the company-specific risk be diversified away by investing in both Indofood Cbp and Arthavest Tbk 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 Indofood Cbp and Arthavest Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indofood Cbp Sukses and Arthavest Tbk, you can compare the effects of market volatilities on Indofood Cbp and Arthavest Tbk 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 Indofood Cbp with a short position of Arthavest Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Cbp and Arthavest Tbk.
Diversification Opportunities for Indofood Cbp and Arthavest Tbk
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indofood and Arthavest is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Cbp Sukses and Arthavest Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthavest Tbk and Indofood Cbp 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 Indofood Cbp Sukses are associated (or correlated) with Arthavest Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthavest Tbk has no effect on the direction of Indofood Cbp i.e., Indofood Cbp and Arthavest Tbk go up and down completely randomly.
Pair Corralation between Indofood Cbp and Arthavest Tbk
Assuming the 90 days trading horizon Indofood Cbp Sukses is expected to generate 1.06 times more return on investment than Arthavest Tbk. However, Indofood Cbp is 1.06 times more volatile than Arthavest Tbk. It trades about 0.1 of its potential returns per unit of risk. Arthavest Tbk is currently generating about -0.05 per unit of risk. If you would invest 1,012,644 in Indofood Cbp Sukses on September 2, 2024 and sell it today you would earn a total of 177,356 from holding Indofood Cbp Sukses or generate 17.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indofood Cbp Sukses vs. Arthavest Tbk
Performance |
| Timeline |
| Indofood Cbp Sukses |
| Arthavest Tbk |
Indofood Cbp and Arthavest Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Cbp and Arthavest Tbk
The main advantage of trading using opposite Indofood Cbp and Arthavest Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Cbp position performs unexpectedly, Arthavest Tbk 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 Arthavest Tbk will offset losses from the drop in Arthavest Tbk's long position.| Indofood Cbp vs. Unilever Indonesia Tbk | Indofood Cbp vs. PT Indofood Sukses | Indofood Cbp vs. Astra International Tbk | Indofood Cbp vs. Telkom Indonesia Tbk |
| Arthavest Tbk vs. Asuransi Bintang Tbk | Arthavest Tbk vs. Pacific Strategic Financial | Arthavest Tbk vs. Maming Enam Sembilan | Arthavest Tbk vs. Asuransi Harta Aman |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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