Correlation Between PT Indofood and JinkoSolar Holding
Can any of the company-specific risk be diversified away by investing in both PT Indofood and JinkoSolar Holding 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 JinkoSolar Holding 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 JinkoSolar Holding Co, you can compare the effects of market volatilities on PT Indofood and JinkoSolar Holding 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 JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and JinkoSolar Holding.
Diversification Opportunities for PT Indofood and JinkoSolar Holding
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ISM and JinkoSolar is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding 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 JinkoSolar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JinkoSolar Holding has no effect on the direction of PT Indofood i.e., PT Indofood and JinkoSolar Holding go up and down completely randomly.
Pair Corralation between PT Indofood and JinkoSolar Holding
Assuming the 90 days horizon PT Indofood Sukses is expected to generate 0.82 times more return on investment than JinkoSolar Holding. However, PT Indofood Sukses is 1.22 times less risky than JinkoSolar Holding. It trades about 0.09 of its potential returns per unit of risk. JinkoSolar Holding Co is currently generating about 0.06 per unit of risk. If you would invest 33.00 in PT Indofood Sukses on September 14, 2024 and sell it today you would earn a total of 15.00 from holding PT Indofood Sukses or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indofood Sukses vs. JinkoSolar Holding Co
Performance |
| Timeline |
| PT Indofood Sukses |
| JinkoSolar Holding |
PT Indofood and JinkoSolar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and JinkoSolar Holding
The main advantage of trading using opposite PT Indofood and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, JinkoSolar Holding 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 JinkoSolar Holding will offset losses from the drop in JinkoSolar Holding's long position.| PT Indofood vs. Hormel Foods | PT Indofood vs. Superior Plus Corp | PT Indofood vs. SIVERS SEMICONDUCTORS AB | PT Indofood vs. NorAm Drilling AS |
| JinkoSolar Holding vs. PT Indofood Sukses | JinkoSolar Holding vs. PICKN PAY STORES | JinkoSolar Holding vs. Dairy Farm International | JinkoSolar Holding vs. JJ SNACK 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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