Correlation Between Indofood Cbp and PT Multitrend
Can any of the company-specific risk be diversified away by investing in both Indofood Cbp and PT Multitrend 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 PT Multitrend 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 PT Multitrend Indo, you can compare the effects of market volatilities on Indofood Cbp and PT Multitrend 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 PT Multitrend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Cbp and PT Multitrend.
Diversification Opportunities for Indofood Cbp and PT Multitrend
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indofood and BABY is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Cbp Sukses and PT Multitrend Indo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Multitrend Indo 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 PT Multitrend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Multitrend Indo has no effect on the direction of Indofood Cbp i.e., Indofood Cbp and PT Multitrend go up and down completely randomly.
Pair Corralation between Indofood Cbp and PT Multitrend
Assuming the 90 days trading horizon Indofood Cbp is expected to generate 3.79 times less return on investment than PT Multitrend. But when comparing it to its historical volatility, Indofood Cbp Sukses is 3.3 times less risky than PT Multitrend. It trades about 0.11 of its potential returns per unit of risk. PT Multitrend Indo is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 17,000 in PT Multitrend Indo on August 30, 2024 and sell it today you would earn a total of 13,400 from holding PT Multitrend Indo or generate 78.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indofood Cbp Sukses vs. PT Multitrend Indo
Performance |
| Timeline |
| Indofood Cbp Sukses |
| PT Multitrend Indo |
Indofood Cbp and PT Multitrend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Cbp and PT Multitrend
The main advantage of trading using opposite Indofood Cbp and PT Multitrend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Cbp position performs unexpectedly, PT Multitrend 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 PT Multitrend will offset losses from the drop in PT Multitrend's long position.| Indofood Cbp vs. Bakrieland Development Tbk | Indofood Cbp vs. Bakrie Brothers Tbk | Indofood Cbp vs. Energi Mega Persada | Indofood Cbp vs. Sampoerna Agro Tbk |
| PT Multitrend vs. Metro Healthcare Indonesia | PT Multitrend vs. Indofood Cbp Sukses | PT Multitrend vs. PT UBC Medical | PT Multitrend vs. Hoffmen Cleanindo |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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