Correlation Between PT Indofood and Hisense Home
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Hisense Home 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 Hisense Home 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 Hisense Home Appliances, you can compare the effects of market volatilities on PT Indofood and Hisense Home 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 Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Hisense Home.
Diversification Opportunities for PT Indofood and Hisense Home
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between ISM and Hisense is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances 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 Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of PT Indofood i.e., PT Indofood and Hisense Home go up and down completely randomly.
Pair Corralation between PT Indofood and Hisense Home
Assuming the 90 days horizon PT Indofood Sukses is expected to generate 1.11 times more return on investment than Hisense Home. However, PT Indofood is 1.11 times more volatile than Hisense Home Appliances. It trades about -0.02 of its potential returns per unit of risk. Hisense Home Appliances is currently generating about -0.15 per unit of risk. If you would invest 45.00 in PT Indofood Sukses on September 1, 2024 and sell it today you would lose (1.00) from holding PT Indofood Sukses or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Indofood Sukses vs. Hisense Home Appliances
Performance |
| Timeline |
| PT Indofood Sukses |
| Hisense Home Appliances |
PT Indofood and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Hisense Home
The main advantage of trading using opposite PT Indofood and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Hisense Home 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 Hisense Home will offset losses from the drop in Hisense Home's long position.| PT Indofood vs. Danone SA | PT Indofood vs. Superior Plus Corp | PT Indofood vs. NMI Holdings | PT Indofood vs. Origin Agritech |
| Hisense Home vs. MELIA HOTELS | Hisense Home vs. REGAL ASIAN INVESTMENTS | Hisense Home vs. Chuangs China Investments | Hisense Home vs. Japan Asia Investment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |