Correlation Between PT Indofood and Biogen
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Biogen 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 Biogen 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 Biogen Inc, you can compare the effects of market volatilities on PT Indofood and Biogen 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 Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Biogen.
Diversification Opportunities for PT Indofood and Biogen
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ISM and Biogen is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of PT Indofood i.e., PT Indofood and Biogen go up and down completely randomly.
Pair Corralation between PT Indofood and Biogen
Assuming the 90 days horizon PT Indofood Sukses is expected to generate 1.19 times more return on investment than Biogen. However, PT Indofood is 1.19 times more volatile than Biogen Inc. It trades about 0.05 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.04 per unit of risk. If you would invest 42.00 in PT Indofood Sukses on September 4, 2024 and sell it today you would earn a total of 1.00 from holding PT Indofood Sukses or generate 2.38% 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. Biogen Inc
Performance |
| Timeline |
| PT Indofood Sukses |
| Biogen Inc |
PT Indofood and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Biogen
The main advantage of trading using opposite PT Indofood and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen'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 |
| Biogen vs. Zijin Mining Group | Biogen vs. GALENA MINING LTD | Biogen vs. Western Copper and | Biogen vs. Harmony Gold Mining |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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