Correlation Between Indofood Cbp and Campina Ice
Can any of the company-specific risk be diversified away by investing in both Indofood Cbp and Campina Ice 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 Campina Ice 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 Campina Ice Cream, you can compare the effects of market volatilities on Indofood Cbp and Campina Ice 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 Campina Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Cbp and Campina Ice.
Diversification Opportunities for Indofood Cbp and Campina Ice
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indofood and Campina is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Cbp Sukses and Campina Ice Cream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campina Ice Cream 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 Campina Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Campina Ice Cream has no effect on the direction of Indofood Cbp i.e., Indofood Cbp and Campina Ice go up and down completely randomly.
Pair Corralation between Indofood Cbp and Campina Ice
Assuming the 90 days trading horizon Indofood Cbp Sukses is expected to generate 0.75 times more return on investment than Campina Ice. However, Indofood Cbp Sukses is 1.34 times less risky than Campina Ice. It trades about -0.13 of its potential returns per unit of risk. Campina Ice Cream is currently generating about -0.23 per unit of risk. If you would invest 1,257,500 in Indofood Cbp Sukses on August 30, 2024 and sell it today you would lose (60,000) from holding Indofood Cbp Sukses or give up 4.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indofood Cbp Sukses vs. Campina Ice Cream
Performance |
| Timeline |
| Indofood Cbp Sukses |
| Campina Ice Cream |
Indofood Cbp and Campina Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Cbp and Campina Ice
The main advantage of trading using opposite Indofood Cbp and Campina Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Cbp position performs unexpectedly, Campina Ice 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 Campina Ice will offset losses from the drop in Campina Ice'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 |
| Campina Ice vs. Bakrieland Development Tbk | Campina Ice vs. Bakrie Brothers Tbk | Campina Ice vs. Energi Mega Persada | Campina Ice vs. Sampoerna Agro 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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