Correlation Between PT Indofood and Hanjaya Mandala
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Hanjaya Mandala 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 Hanjaya Mandala 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 Hanjaya Mandala Sampoerna, you can compare the effects of market volatilities on PT Indofood and Hanjaya Mandala 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 Hanjaya Mandala. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Hanjaya Mandala.
Diversification Opportunities for PT Indofood and Hanjaya Mandala
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between INDF and Hanjaya is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Hanjaya Mandala Sampoerna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjaya Mandala Sampoerna 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 Hanjaya Mandala. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjaya Mandala Sampoerna has no effect on the direction of PT Indofood i.e., PT Indofood and Hanjaya Mandala go up and down completely randomly.
Pair Corralation between PT Indofood and Hanjaya Mandala
Assuming the 90 days trading horizon PT Indofood Sukses is expected to generate 1.67 times more return on investment than Hanjaya Mandala. However, PT Indofood is 1.67 times more volatile than Hanjaya Mandala Sampoerna. It trades about 0.11 of its potential returns per unit of risk. Hanjaya Mandala Sampoerna is currently generating about -0.23 per unit of risk. If you would invest 755,000 in PT Indofood Sukses on November 4, 2024 and sell it today you would earn a total of 25,000 from holding PT Indofood Sukses or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indofood Sukses vs. Hanjaya Mandala Sampoerna
Performance |
| Timeline |
| PT Indofood Sukses |
| Hanjaya Mandala Sampoerna |
PT Indofood and Hanjaya Mandala Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Hanjaya Mandala
The main advantage of trading using opposite PT Indofood and Hanjaya Mandala positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Hanjaya Mandala 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 Hanjaya Mandala will offset losses from the drop in Hanjaya Mandala'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 |
| Hanjaya Mandala vs. Gudang Garam Tbk | Hanjaya Mandala vs. Unilever Indonesia Tbk | Hanjaya Mandala vs. Indofood Cbp Sukses | Hanjaya Mandala vs. PT Indofood 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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