Correlation Between PT Indofood and PT Winner
Can any of the company-specific risk be diversified away by investing in both PT Indofood and PT Winner 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 Winner 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 Winner Nusantara, you can compare the effects of market volatilities on PT Indofood and PT Winner 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 Winner. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and PT Winner.
Diversification Opportunities for PT Indofood and PT Winner
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INDF and WINR is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and PT Winner Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Winner Nusantara 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 Winner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Winner Nusantara has no effect on the direction of PT Indofood i.e., PT Indofood and PT Winner go up and down completely randomly.
Pair Corralation between PT Indofood and PT Winner
Assuming the 90 days trading horizon PT Indofood Sukses is expected to generate 0.41 times more return on investment than PT Winner. However, PT Indofood Sukses is 2.43 times less risky than PT Winner. It trades about 0.02 of its potential returns per unit of risk. PT Winner Nusantara is currently generating about -0.09 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 2,500 from holding PT Indofood Sukses or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indofood Sukses vs. PT Winner Nusantara
Performance |
| Timeline |
| PT Indofood Sukses |
| PT Winner Nusantara |
PT Indofood and PT Winner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and PT Winner
The main advantage of trading using opposite PT Indofood and PT Winner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, PT Winner 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 Winner will offset losses from the drop in PT Winner'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 |
| PT Winner vs. Pollux Properti Indonesia | PT Winner vs. Maha Properti Indonesia | PT Winner vs. Mega Manunggal Property | PT Winner vs. Urban Jakarta Propertindo |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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