Correlation Between Japfa Comfeed and Malindo Feedmill
Can any of the company-specific risk be diversified away by investing in both Japfa Comfeed and Malindo Feedmill 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 Japfa Comfeed and Malindo Feedmill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japfa Comfeed Indonesia and Malindo Feedmill Tbk, you can compare the effects of market volatilities on Japfa Comfeed and Malindo Feedmill 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 Japfa Comfeed with a short position of Malindo Feedmill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japfa Comfeed and Malindo Feedmill.
Diversification Opportunities for Japfa Comfeed and Malindo Feedmill
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japfa and Malindo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Japfa Comfeed Indonesia and Malindo Feedmill Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malindo Feedmill Tbk and Japfa Comfeed 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 Japfa Comfeed Indonesia are associated (or correlated) with Malindo Feedmill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malindo Feedmill Tbk has no effect on the direction of Japfa Comfeed i.e., Japfa Comfeed and Malindo Feedmill go up and down completely randomly.
Pair Corralation between Japfa Comfeed and Malindo Feedmill
Assuming the 90 days trading horizon Japfa Comfeed Indonesia is expected to generate 0.69 times more return on investment than Malindo Feedmill. However, Japfa Comfeed Indonesia is 1.45 times less risky than Malindo Feedmill. It trades about -0.04 of its potential returns per unit of risk. Malindo Feedmill Tbk is currently generating about -0.17 per unit of risk. If you would invest 200,000 in Japfa Comfeed Indonesia on November 28, 2024 and sell it today you would lose (3,000) from holding Japfa Comfeed Indonesia or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japfa Comfeed Indonesia vs. Malindo Feedmill Tbk
Performance |
| Timeline |
| Japfa Comfeed Indonesia |
| Malindo Feedmill Tbk |
Japfa Comfeed and Malindo Feedmill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japfa Comfeed and Malindo Feedmill
The main advantage of trading using opposite Japfa Comfeed and Malindo Feedmill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japfa Comfeed position performs unexpectedly, Malindo Feedmill 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 Malindo Feedmill will offset losses from the drop in Malindo Feedmill's long position.| Japfa Comfeed vs. Charoen Pokphand Indonesia | Japfa Comfeed vs. Kalbe Farma Tbk | Japfa Comfeed vs. Indofood Cbp Sukses | Japfa Comfeed vs. PT Indofood Sukses |
| Malindo Feedmill vs. Japfa Comfeed Indonesia | Malindo Feedmill vs. Charoen Pokphand Indonesia | Malindo Feedmill vs. Surya Semesta Internusa | Malindo Feedmill vs. Mitra Adiperkasa Tbk |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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