Correlation Between Indofood Cbp and Bintang Oto
Can any of the company-specific risk be diversified away by investing in both Indofood Cbp and Bintang Oto 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 Bintang Oto 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 Bintang Oto Global, you can compare the effects of market volatilities on Indofood Cbp and Bintang Oto 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 Bintang Oto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Cbp and Bintang Oto.
Diversification Opportunities for Indofood Cbp and Bintang Oto
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indofood and Bintang is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Cbp Sukses and Bintang Oto Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Oto Global 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 Bintang Oto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Oto Global has no effect on the direction of Indofood Cbp i.e., Indofood Cbp and Bintang Oto go up and down completely randomly.
Pair Corralation between Indofood Cbp and Bintang Oto
Assuming the 90 days trading horizon Indofood Cbp Sukses is expected to generate 1.97 times more return on investment than Bintang Oto. However, Indofood Cbp is 1.97 times more volatile than Bintang Oto Global. It trades about -0.12 of its potential returns per unit of risk. Bintang Oto Global is currently generating about -0.47 per unit of risk. If you would invest 1,245,000 in Indofood Cbp Sukses on August 31, 2024 and sell it today you would lose (55,000) from holding Indofood Cbp Sukses or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indofood Cbp Sukses vs. Bintang Oto Global
Performance |
| Timeline |
| Indofood Cbp Sukses |
| Bintang Oto Global |
Indofood Cbp and Bintang Oto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Cbp and Bintang Oto
The main advantage of trading using opposite Indofood Cbp and Bintang Oto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Cbp position performs unexpectedly, Bintang Oto 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 Bintang Oto will offset losses from the drop in Bintang Oto's long position.| Indofood Cbp vs. Bank BRISyariah Tbk | Indofood Cbp vs. Mitra Pinasthika Mustika | Indofood Cbp vs. Jakarta Int Hotels | Indofood Cbp vs. Indosterling Technomedia Tbk |
| Bintang Oto vs. Japfa Comfeed Indonesia | Bintang Oto vs. Charoen Pokphand Indonesia | Bintang Oto vs. Erajaya Swasembada Tbk | Bintang Oto vs. Indofood Cbp Sukses |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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