Correlation Between PT Indofood and PT Wahana
Can any of the company-specific risk be diversified away by investing in both PT Indofood and PT Wahana 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 PT Wahana 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 PT Wahana Interfood, you can compare the effects of market volatilities on PT Indofood and PT Wahana 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 PT Wahana. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and PT Wahana.
Diversification Opportunities for PT Indofood and PT Wahana
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INDF and COCO is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and PT Wahana Interfood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Wahana Interfood 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 PT Wahana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Wahana Interfood has no effect on the direction of PT Indofood i.e., PT Indofood and PT Wahana go up and down completely randomly.
Pair Corralation between PT Indofood and PT Wahana
Assuming the 90 days trading horizon PT Indofood Sukses is expected to generate 1.09 times more return on investment than PT Wahana. However, PT Indofood is 1.09 times more volatile than PT Wahana Interfood. It trades about 0.0 of its potential returns per unit of risk. PT Wahana Interfood is currently generating about -0.12 per unit of risk. If you would invest 750,000 in PT Indofood Sukses on August 26, 2024 and sell it today you would lose (2,500) from holding PT Indofood Sukses or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indofood Sukses vs. PT Wahana Interfood
Performance |
| Timeline |
| PT Indofood Sukses |
| PT Wahana Interfood |
PT Indofood and PT Wahana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and PT Wahana
The main advantage of trading using opposite PT Indofood and PT Wahana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, PT Wahana 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 Wahana will offset losses from the drop in PT Wahana's long position.| PT Indofood vs. Charoen Pokphand Indonesia | PT Indofood vs. Kalbe Farma Tbk | PT Indofood vs. Indofood Cbp Sukses | PT Indofood vs. Akr Corporindo Tbk |
| PT Wahana vs. Garudafood Putra Putri | PT Wahana vs. Sentra Food Indonesia | PT Wahana vs. Campina Ice Cream | PT Wahana vs. Diamond Food Indonesia |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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