Correlation Between PT Indofood and SEKISUI CHEMICAL
Can any of the company-specific risk be diversified away by investing in both PT Indofood and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL 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 SEKISUI CHEMICAL, you can compare the effects of market volatilities on PT Indofood and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and SEKISUI CHEMICAL.
Diversification Opportunities for PT Indofood and SEKISUI CHEMICAL
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ISM and SEKISUI is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and SEKISUI CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEKISUI CHEMICAL has no effect on the direction of PT Indofood i.e., PT Indofood and SEKISUI CHEMICAL go up and down completely randomly.
Pair Corralation between PT Indofood and SEKISUI CHEMICAL
Assuming the 90 days horizon PT Indofood Sukses is expected to generate 2.95 times more return on investment than SEKISUI CHEMICAL. However, PT Indofood is 2.95 times more volatile than SEKISUI CHEMICAL. It trades about 0.02 of its potential returns per unit of risk. SEKISUI CHEMICAL is currently generating about 0.02 per unit of risk. If you would invest 40.00 in PT Indofood Sukses on September 24, 2024 and sell it today you would earn a total of 3.00 from holding PT Indofood Sukses or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indofood Sukses vs. SEKISUI CHEMICAL
Performance |
| Timeline |
| PT Indofood Sukses |
| SEKISUI CHEMICAL |
PT Indofood and SEKISUI CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and SEKISUI CHEMICAL
The main advantage of trading using opposite PT Indofood and SEKISUI CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, SEKISUI CHEMICAL 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 SEKISUI CHEMICAL will offset losses from the drop in SEKISUI CHEMICAL's long position.| PT Indofood vs. Mowi ASA | PT Indofood vs. LEROY SEAFOOD GRUNSPADR | PT Indofood vs. Lery Seafood Group | PT Indofood vs. Nisshin Seifun Group |
| SEKISUI CHEMICAL vs. Scientific Games | SEKISUI CHEMICAL vs. PT Ace Hardware | SEKISUI CHEMICAL vs. GAMING FAC SA | SEKISUI CHEMICAL vs. SMA Solar Technology |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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