Correlation Between Indofood CBP and Artisan Consumer
Can any of the company-specific risk be diversified away by investing in both Indofood CBP and Artisan Consumer 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 Indofood CBP and Artisan Consumer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indofood CBP Sukses and Artisan Consumer Goods, you can compare the effects of market volatilities on Indofood CBP and Artisan Consumer 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 Indofood CBP with a short position of Artisan Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood CBP and Artisan Consumer.
Diversification Opportunities for Indofood CBP and Artisan Consumer
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indofood and Artisan is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Indofood CBP Sukses and Artisan Consumer Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Consumer Goods and Indofood CBP 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 Indofood CBP Sukses are associated (or correlated) with Artisan Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Consumer Goods has no effect on the direction of Indofood CBP i.e., Indofood CBP and Artisan Consumer go up and down completely randomly.
Pair Corralation between Indofood CBP and Artisan Consumer
Assuming the 90 days horizon Indofood CBP Sukses is expected to under-perform the Artisan Consumer. But the pink sheet apears to be less risky and, when comparing its historical volatility, Indofood CBP Sukses is 6.25 times less risky than Artisan Consumer. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Artisan Consumer Goods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Artisan Consumer Goods on September 14, 2024 and sell it today you would earn a total of 14.00 from holding Artisan Consumer Goods or generate 116.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Indofood CBP Sukses vs. Artisan Consumer Goods
Performance |
| Timeline |
| Indofood CBP Sukses |
| Artisan Consumer Goods |
Indofood CBP and Artisan Consumer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood CBP and Artisan Consumer
The main advantage of trading using opposite Indofood CBP and Artisan Consumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood CBP position performs unexpectedly, Artisan Consumer 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 Artisan Consumer will offset losses from the drop in Artisan Consumer's long position.| Indofood CBP vs. Indofood Sukses Makmur | Indofood CBP vs. First Pacific | Indofood CBP vs. Grupo Herdez SAB | Indofood CBP vs. Fraser and Neave |
| Artisan Consumer vs. Altavoz Entertainment | Artisan Consumer vs. Avi Ltd ADR | Artisan Consumer vs. The a2 Milk | Artisan Consumer vs. Aryzta AG PK |
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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