Correlation Between PT Indofood and CNVISION MEDIA
Can any of the company-specific risk be diversified away by investing in both PT Indofood and CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA, you can compare the effects of market volatilities on PT Indofood and CNVISION MEDIA 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 CNVISION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and CNVISION MEDIA.
Diversification Opportunities for PT Indofood and CNVISION MEDIA
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ISM and CNVISION is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA 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 CNVISION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNVISION MEDIA has no effect on the direction of PT Indofood i.e., PT Indofood and CNVISION MEDIA go up and down completely randomly.
Pair Corralation between PT Indofood and CNVISION MEDIA
Assuming the 90 days horizon PT Indofood Sukses is expected to generate 1.29 times more return on investment than CNVISION MEDIA. However, PT Indofood is 1.29 times more volatile than CNVISION MEDIA. It trades about 0.02 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about 0.0 per unit of risk. If you would invest 43.00 in PT Indofood Sukses on August 26, 2024 and sell it today you would earn a total of 1.00 from holding PT Indofood Sukses or generate 2.33% 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. CNVISION MEDIA
Performance |
| Timeline |
| PT Indofood Sukses |
| CNVISION MEDIA |
PT Indofood and CNVISION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and CNVISION MEDIA
The main advantage of trading using opposite PT Indofood and CNVISION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, CNVISION MEDIA 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 CNVISION MEDIA will offset losses from the drop in CNVISION MEDIA's long position.| PT Indofood vs. Superior Plus Corp | PT Indofood vs. NMI Holdings | PT Indofood vs. Origin Agritech | PT Indofood vs. SIVERS SEMICONDUCTORS AB |
| CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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