Correlation Between Indofood CBP and Fraser
Can any of the company-specific risk be diversified away by investing in both Indofood CBP and Fraser 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 Fraser 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 Fraser and Neave, you can compare the effects of market volatilities on Indofood CBP and Fraser 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 Fraser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood CBP and Fraser.
Diversification Opportunities for Indofood CBP and Fraser
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Indofood and Fraser is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Indofood CBP Sukses and Fraser and Neave in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fraser and Neave 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 Fraser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fraser and Neave has no effect on the direction of Indofood CBP i.e., Indofood CBP and Fraser go up and down completely randomly.
Pair Corralation between Indofood CBP and Fraser
Assuming the 90 days horizon Indofood CBP Sukses is expected to under-perform the Fraser. In addition to that, Indofood CBP is 1.01 times more volatile than Fraser and Neave. It trades about 0.0 of its total potential returns per unit of risk. Fraser and Neave is currently generating about 0.13 per unit of volatility. If you would invest 69.00 in Fraser and Neave on September 14, 2024 and sell it today you would earn a total of 43.00 from holding Fraser and Neave or generate 62.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 63.57% |
| Values | Daily Returns |
Indofood CBP Sukses vs. Fraser and Neave
Performance |
| Timeline |
| Indofood CBP Sukses |
| Fraser and Neave |
Indofood CBP and Fraser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood CBP and Fraser
The main advantage of trading using opposite Indofood CBP and Fraser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood CBP position performs unexpectedly, Fraser 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 Fraser will offset losses from the drop in Fraser'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 |
| Fraser vs. Premier Foods Plc | Fraser vs. Torque Lifestyle Brands | Fraser vs. Naturally Splendid Enterprises | Fraser 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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