Correlation Between Indofood Cbp and Astra Otoparts
Can any of the company-specific risk be diversified away by investing in both Indofood Cbp and Astra Otoparts 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 Astra Otoparts 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 Astra Otoparts Tbk, you can compare the effects of market volatilities on Indofood Cbp and Astra Otoparts 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 Astra Otoparts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Cbp and Astra Otoparts.
Diversification Opportunities for Indofood Cbp and Astra Otoparts
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indofood and Astra is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Cbp Sukses and Astra Otoparts Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Otoparts 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 Astra Otoparts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Otoparts Tbk has no effect on the direction of Indofood Cbp i.e., Indofood Cbp and Astra Otoparts go up and down completely randomly.
Pair Corralation between Indofood Cbp and Astra Otoparts
Assuming the 90 days trading horizon Indofood Cbp Sukses is expected to generate 0.76 times more return on investment than Astra Otoparts. However, Indofood Cbp Sukses is 1.32 times less risky than Astra Otoparts. It trades about 0.04 of its potential returns per unit of risk. Astra Otoparts Tbk is currently generating about 0.02 per unit of risk. If you would invest 1,032,260 in Indofood Cbp Sukses on September 4, 2024 and sell it today you would earn a total of 147,740 from holding Indofood Cbp Sukses or generate 14.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Indofood Cbp Sukses vs. Astra Otoparts Tbk
Performance |
| Timeline |
| Indofood Cbp Sukses |
| Astra Otoparts Tbk |
Indofood Cbp and Astra Otoparts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Cbp and Astra Otoparts
The main advantage of trading using opposite Indofood Cbp and Astra Otoparts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Cbp position performs unexpectedly, Astra Otoparts 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 Astra Otoparts will offset losses from the drop in Astra Otoparts' 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 |
| Astra Otoparts vs. Gajah Tunggal Tbk | Astra Otoparts vs. Astra Graphia Tbk | Astra Otoparts vs. Indomobil Sukses Internasional | Astra Otoparts vs. Astra Agro Lestari |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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