Correlation Between PT Indofood and Allstate
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Allstate 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 Allstate 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 The Allstate, you can compare the effects of market volatilities on PT Indofood and Allstate 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 Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Allstate.
Diversification Opportunities for PT Indofood and Allstate
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ISM and Allstate is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate 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 Allstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstate has no effect on the direction of PT Indofood i.e., PT Indofood and Allstate go up and down completely randomly.
Pair Corralation between PT Indofood and Allstate
Assuming the 90 days horizon PT Indofood is expected to generate 1.21 times less return on investment than Allstate. In addition to that, PT Indofood is 2.65 times more volatile than The Allstate. It trades about 0.04 of its total potential returns per unit of risk. The Allstate is currently generating about 0.12 per unit of volatility. If you would invest 12,513 in The Allstate on September 4, 2024 and sell it today you would earn a total of 6,852 from holding The Allstate or generate 54.76% 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. The Allstate
Performance |
| Timeline |
| PT Indofood Sukses |
| Allstate |
PT Indofood and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Allstate
The main advantage of trading using opposite PT Indofood and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Allstate 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 Allstate will offset losses from the drop in Allstate's long position.| PT Indofood vs. Zurich Insurance Group | PT Indofood vs. ASURE SOFTWARE | PT Indofood vs. Unity Software | PT Indofood vs. Alfa Financial Software |
| Allstate vs. AUSTEVOLL SEAFOOD | Allstate vs. PT Indofood Sukses | Allstate vs. Enter Air SA | Allstate vs. Cal Maine Foods |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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