Correlation Between Indosat Tbk and Indofood Cbp
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Indofood Cbp 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 Indosat Tbk and Indofood Cbp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Indofood Cbp Sukses, you can compare the effects of market volatilities on Indosat Tbk and Indofood Cbp 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 Indosat Tbk with a short position of Indofood Cbp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Indofood Cbp.
Diversification Opportunities for Indosat Tbk and Indofood Cbp
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indosat and Indofood is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Indofood Cbp Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indofood Cbp Sukses and Indosat Tbk 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 Indosat Tbk are associated (or correlated) with Indofood Cbp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indofood Cbp Sukses has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Indofood Cbp go up and down completely randomly.
Pair Corralation between Indosat Tbk and Indofood Cbp
Assuming the 90 days trading horizon Indosat Tbk is expected to generate 2.33 times more return on investment than Indofood Cbp. However, Indosat Tbk is 2.33 times more volatile than Indofood Cbp Sukses. It trades about 0.04 of its potential returns per unit of risk. Indofood Cbp Sukses is currently generating about -0.12 per unit of risk. If you would invest 232,000 in Indosat Tbk on August 31, 2024 and sell it today you would earn a total of 5,000 from holding Indosat Tbk or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. Indofood Cbp Sukses
Performance |
| Timeline |
| Indosat Tbk |
| Indofood Cbp Sukses |
Indosat Tbk and Indofood Cbp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and Indofood Cbp
The main advantage of trading using opposite Indosat Tbk and Indofood Cbp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk position performs unexpectedly, Indofood Cbp 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 Indofood Cbp will offset losses from the drop in Indofood Cbp's long position.| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
| Indofood Cbp vs. Bank BRISyariah Tbk | Indofood Cbp vs. Mitra Pinasthika Mustika | Indofood Cbp vs. Jakarta Int Hotels | Indofood Cbp vs. Indosterling Technomedia 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |