Correlation Between PT Indofood and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Garudafood Putra 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 Garudafood Putra 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 Garudafood Putra Putri, you can compare the effects of market volatilities on PT Indofood and Garudafood Putra 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 Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Garudafood Putra.
Diversification Opportunities for PT Indofood and Garudafood Putra
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INDF and Garudafood is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Garudafood Putra Putri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garudafood Putra Putri 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 Garudafood Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garudafood Putra Putri has no effect on the direction of PT Indofood i.e., PT Indofood and Garudafood Putra go up and down completely randomly.
Pair Corralation between PT Indofood and Garudafood Putra
Assuming the 90 days trading horizon PT Indofood Sukses is expected to generate 0.68 times more return on investment than Garudafood Putra. However, PT Indofood Sukses is 1.48 times less risky than Garudafood Putra. It trades about 0.03 of its potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.08 per unit of risk. If you would invest 757,500 in PT Indofood Sukses on August 30, 2024 and sell it today you would earn a total of 7,500 from holding PT Indofood Sukses or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indofood Sukses vs. Garudafood Putra Putri
Performance |
| Timeline |
| PT Indofood Sukses |
| Garudafood Putra Putri |
PT Indofood and Garudafood Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Garudafood Putra
The main advantage of trading using opposite PT Indofood and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Garudafood Putra 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 Garudafood Putra will offset losses from the drop in Garudafood Putra's long position.| PT Indofood vs. Astra International Tbk | PT Indofood vs. Unilever Indonesia Tbk | PT Indofood vs. Telkom Indonesia Tbk | PT Indofood vs. Bank Mandiri Persero |
| Garudafood Putra vs. Sariguna Primatirta PT | Garudafood Putra vs. Ultra Jaya Milk | Garudafood Putra vs. Nippon Indosari Corpindo | Garudafood Putra vs. Kino Indonesia 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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