Correlation Between Laureate Education and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Laureate Education and PT Indofood 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 Laureate Education and PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and PT Indofood Sukses, you can compare the effects of market volatilities on Laureate Education and PT Indofood 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 Laureate Education with a short position of PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and PT Indofood.
Diversification Opportunities for Laureate Education and PT Indofood
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Laureate and ISM is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education and PT Indofood Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indofood Sukses and Laureate Education 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 Laureate Education are associated (or correlated) with PT Indofood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indofood Sukses has no effect on the direction of Laureate Education i.e., Laureate Education and PT Indofood go up and down completely randomly.
Pair Corralation between Laureate Education and PT Indofood
Assuming the 90 days trading horizon Laureate Education is expected to generate 0.5 times more return on investment than PT Indofood. However, Laureate Education is 2.0 times less risky than PT Indofood. It trades about 0.08 of its potential returns per unit of risk. PT Indofood Sukses is currently generating about 0.03 per unit of risk. If you would invest 855.00 in Laureate Education on September 14, 2024 and sell it today you would earn a total of 905.00 from holding Laureate Education or generate 105.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laureate Education vs. PT Indofood Sukses
Performance |
| Timeline |
| Laureate Education |
| PT Indofood Sukses |
Laureate Education and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laureate Education and PT Indofood
The main advantage of trading using opposite Laureate Education and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education position performs unexpectedly, PT Indofood 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 PT Indofood will offset losses from the drop in PT Indofood's long position.| Laureate Education vs. NISSIN FOODS HLDGS | Laureate Education vs. TOREX SEMICONDUCTOR LTD | Laureate Education vs. NXP Semiconductors NV | Laureate Education vs. THAI BEVERAGE |
| PT Indofood vs. Hormel Foods | PT Indofood vs. Superior Plus Corp | PT Indofood vs. SIVERS SEMICONDUCTORS AB | PT Indofood vs. NorAm Drilling AS |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |