Correlation Between Indofood CBP and Grupo Herdez
Can any of the company-specific risk be diversified away by investing in both Indofood CBP and Grupo Herdez 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 Grupo Herdez 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 Grupo Herdez SAB, you can compare the effects of market volatilities on Indofood CBP and Grupo Herdez 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 Grupo Herdez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood CBP and Grupo Herdez.
Diversification Opportunities for Indofood CBP and Grupo Herdez
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indofood and Grupo is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Indofood CBP Sukses and Grupo Herdez SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Herdez SAB 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 Grupo Herdez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Herdez SAB has no effect on the direction of Indofood CBP i.e., Indofood CBP and Grupo Herdez go up and down completely randomly.
Pair Corralation between Indofood CBP and Grupo Herdez
Assuming the 90 days horizon Indofood CBP Sukses is expected to under-perform the Grupo Herdez. In addition to that, Indofood CBP is 1.22 times more volatile than Grupo Herdez SAB. It trades about 0.0 of its total potential returns per unit of risk. Grupo Herdez SAB is currently generating about 0.05 per unit of volatility. If you would invest 217.00 in Grupo Herdez SAB on September 14, 2024 and sell it today you would earn a total of 53.00 from holding Grupo Herdez SAB or generate 24.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Indofood CBP Sukses vs. Grupo Herdez SAB
Performance |
| Timeline |
| Indofood CBP Sukses |
| Grupo Herdez SAB |
Indofood CBP and Grupo Herdez Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood CBP and Grupo Herdez
The main advantage of trading using opposite Indofood CBP and Grupo Herdez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood CBP position performs unexpectedly, Grupo Herdez 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 Grupo Herdez will offset losses from the drop in Grupo Herdez'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 |
| Grupo Herdez vs. China Feihe Limited | Grupo Herdez vs. WH Group Limited | Grupo Herdez vs. BG Foods | Grupo Herdez vs. First Pacific |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |