Correlation Between PT Indofood and Asuransi Bina
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Asuransi Bina 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 PT Indofood and Asuransi Bina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indofood Sukses and Asuransi Bina Dana, you can compare the effects of market volatilities on PT Indofood and Asuransi Bina 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 PT Indofood with a short position of Asuransi Bina. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Asuransi Bina.
Diversification Opportunities for PT Indofood and Asuransi Bina
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INDF and Asuransi is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Asuransi Bina Dana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Bina Dana and PT Indofood 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 PT Indofood Sukses are associated (or correlated) with Asuransi Bina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Bina Dana has no effect on the direction of PT Indofood i.e., PT Indofood and Asuransi Bina go up and down completely randomly.
Pair Corralation between PT Indofood and Asuransi Bina
Assuming the 90 days trading horizon PT Indofood Sukses is expected to generate 1.14 times more return on investment than Asuransi Bina. However, PT Indofood is 1.14 times more volatile than Asuransi Bina Dana. It trades about 0.08 of its potential returns per unit of risk. Asuransi Bina Dana is currently generating about -0.14 per unit of risk. If you would invest 607,654 in PT Indofood Sukses on September 1, 2024 and sell it today you would earn a total of 147,346 from holding PT Indofood Sukses or generate 24.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indofood Sukses vs. Asuransi Bina Dana
Performance |
| Timeline |
| PT Indofood Sukses |
| Asuransi Bina Dana |
PT Indofood and Asuransi Bina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Asuransi Bina
The main advantage of trading using opposite PT Indofood and Asuransi Bina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Asuransi Bina 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 Asuransi Bina will offset losses from the drop in Asuransi Bina's long position.| PT Indofood vs. Bank BRISyariah Tbk | PT Indofood vs. Mitra Pinasthika Mustika | PT Indofood vs. Jakarta Int Hotels | PT Indofood vs. Indosterling Technomedia Tbk |
| Asuransi Bina vs. Bank BRISyariah Tbk | Asuransi Bina vs. Ace Hardware Indonesia | Asuransi Bina vs. Merdeka Copper Gold | Asuransi Bina vs. Mitra Pinasthika Mustika |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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