Correlation Between Intuitive Machines and Indofood CBP
Can any of the company-specific risk be diversified away by investing in both Intuitive Machines and Indofood CBP 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 Intuitive Machines and Indofood CBP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Machines and Indofood CBP Sukses, you can compare the effects of market volatilities on Intuitive Machines and Indofood CBP 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 Intuitive Machines with a short position of Indofood CBP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Machines and Indofood CBP.
Diversification Opportunities for Intuitive Machines and Indofood CBP
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intuitive and Indofood is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Machines and Indofood CBP Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indofood CBP Sukses and Intuitive Machines 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 Intuitive Machines are associated (or correlated) with Indofood CBP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indofood CBP Sukses has no effect on the direction of Intuitive Machines i.e., Intuitive Machines and Indofood CBP go up and down completely randomly.
Pair Corralation between Intuitive Machines and Indofood CBP
Given the investment horizon of 90 days Intuitive Machines is expected to generate 4.1 times more return on investment than Indofood CBP. However, Intuitive Machines is 4.1 times more volatile than Indofood CBP Sukses. It trades about 0.04 of its potential returns per unit of risk. Indofood CBP Sukses is currently generating about -0.21 per unit of risk. If you would invest 1,176 in Intuitive Machines on September 14, 2024 and sell it today you would lose (10.00) from holding Intuitive Machines or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Intuitive Machines vs. Indofood CBP Sukses
Performance |
| Timeline |
| Intuitive Machines |
| Indofood CBP Sukses |
Intuitive Machines and Indofood CBP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Machines and Indofood CBP
The main advantage of trading using opposite Intuitive Machines and Indofood CBP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Machines position performs unexpectedly, Indofood CBP 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 Indofood CBP will offset losses from the drop in Indofood CBP's long position.| Intuitive Machines vs. Novocure | Intuitive Machines vs. HubSpot | Intuitive Machines vs. DigitalOcean Holdings | Intuitive Machines vs. Appian Corp |
| Indofood CBP vs. Indofood Sukses Makmur | Indofood CBP vs. First Pacific | Indofood CBP vs. Grupo Herdez SAB | Indofood CBP vs. Fraser and Neave |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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