Correlation Between PT Indofood and Ladangbaja Murni
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Ladangbaja Murni 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 Ladangbaja Murni 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 Ladangbaja Murni PT, you can compare the effects of market volatilities on PT Indofood and Ladangbaja Murni 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 Ladangbaja Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Ladangbaja Murni.
Diversification Opportunities for PT Indofood and Ladangbaja Murni
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INDF and Ladangbaja is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Ladangbaja Murni PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladangbaja Murni 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 Ladangbaja Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladangbaja Murni has no effect on the direction of PT Indofood i.e., PT Indofood and Ladangbaja Murni go up and down completely randomly.
Pair Corralation between PT Indofood and Ladangbaja Murni
Assuming the 90 days trading horizon PT Indofood Sukses is expected to generate 0.34 times more return on investment than Ladangbaja Murni. However, PT Indofood Sukses is 2.92 times less risky than Ladangbaja Murni. It trades about 0.03 of its potential returns per unit of risk. Ladangbaja Murni PT is currently generating about -0.11 per unit of risk. If you would invest 752,500 in PT Indofood Sukses on August 29, 2024 and sell it today you would earn a total of 7,500 from holding PT Indofood Sukses or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indofood Sukses vs. Ladangbaja Murni PT
Performance |
| Timeline |
| PT Indofood Sukses |
| Ladangbaja Murni |
PT Indofood and Ladangbaja Murni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Ladangbaja Murni
The main advantage of trading using opposite PT Indofood and Ladangbaja Murni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Ladangbaja Murni 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 Ladangbaja Murni will offset losses from the drop in Ladangbaja Murni'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 |
| Ladangbaja Murni vs. PAM Mineral Tbk | Ladangbaja Murni vs. Nusa Palapa Gemilang | Ladangbaja Murni vs. PT Harapan Duta | Ladangbaja Murni vs. Diagnos Laboratorium Utama |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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