Correlation Between Mayora Indah and Indofood Cbp
Can any of the company-specific risk be diversified away by investing in both Mayora Indah 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 Mayora Indah and Indofood Cbp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayora Indah Tbk and Indofood Cbp Sukses, you can compare the effects of market volatilities on Mayora Indah 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 Mayora Indah with a short position of Indofood Cbp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayora Indah and Indofood Cbp.
Diversification Opportunities for Mayora Indah and Indofood Cbp
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mayora and Indofood is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mayora Indah Tbk 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 Mayora Indah 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 Mayora Indah Tbk 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 Mayora Indah i.e., Mayora Indah and Indofood Cbp go up and down completely randomly.
Pair Corralation between Mayora Indah and Indofood Cbp
Assuming the 90 days trading horizon Mayora Indah Tbk is expected to under-perform the Indofood Cbp. In addition to that, Mayora Indah is 1.73 times more volatile than Indofood Cbp Sukses. It trades about -0.27 of its total potential returns per unit of risk. Indofood Cbp Sukses is currently generating about -0.3 per unit of volatility. If you would invest 1,142,500 in Indofood Cbp Sukses on October 23, 2024 and sell it today you would lose (82,500) from holding Indofood Cbp Sukses or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayora Indah Tbk vs. Indofood Cbp Sukses
Performance |
| Timeline |
| Mayora Indah Tbk |
| Indofood Cbp Sukses |
Mayora Indah and Indofood Cbp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayora Indah and Indofood Cbp
The main advantage of trading using opposite Mayora Indah and Indofood Cbp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayora Indah 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.| Mayora Indah vs. Indofood Cbp Sukses | Mayora Indah vs. Kalbe Farma Tbk | Mayora Indah vs. Unilever Indonesia Tbk | Mayora Indah vs. Ultra Jaya Milk |
| Indofood Cbp vs. Unilever Indonesia Tbk | Indofood Cbp vs. PT Indofood Sukses | Indofood Cbp vs. Astra International Tbk | Indofood Cbp vs. Telkom Indonesia 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 CEOs Directory module to screen CEOs from public companies around the world.
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