Correlation Between PT Indofood and Financial Strategies
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Financial Strategies 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 PT Indofood and Financial Strategies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indofood Sukses and Financial Strategies Acquisition, you can compare the effects of market volatilities on PT Indofood and Financial Strategies 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 PT Indofood with a short position of Financial Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Financial Strategies.
Diversification Opportunities for PT Indofood and Financial Strategies
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PIFMF and Financial is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Financial Strategies Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Strategies and PT Indofood 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 PT Indofood Sukses are associated (or correlated) with Financial Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Strategies has no effect on the direction of PT Indofood i.e., PT Indofood and Financial Strategies go up and down completely randomly.
Pair Corralation between PT Indofood and Financial Strategies
Assuming the 90 days horizon PT Indofood is expected to generate 239.5 times less return on investment than Financial Strategies. In addition to that, PT Indofood is 5.89 times more volatile than Financial Strategies Acquisition. It trades about 0.0 of its total potential returns per unit of risk. Financial Strategies Acquisition is currently generating about 0.18 per unit of volatility. If you would invest 1,014 in Financial Strategies Acquisition on September 3, 2024 and sell it today you would earn a total of 76.00 from holding Financial Strategies Acquisition or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 38.68% |
| Values | Daily Returns |
PT Indofood Sukses vs. Financial Strategies Acquisiti
Performance |
| Timeline |
| PT Indofood Sukses |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Financial Strategies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Indofood and Financial Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Financial Strategies
The main advantage of trading using opposite PT Indofood and Financial Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Financial Strategies 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 Financial Strategies will offset losses from the drop in Financial Strategies' long position.| PT Indofood vs. Aptiv PLC | PT Indofood vs. Sun Life Financial | PT Indofood vs. Aegon NV ADR | PT Indofood vs. Dana Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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