Correlation Between PT Indofood and Lojas Renner
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Lojas Renner 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 Lojas Renner 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 Lojas Renner SA, you can compare the effects of market volatilities on PT Indofood and Lojas Renner 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 Lojas Renner. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Lojas Renner.
Diversification Opportunities for PT Indofood and Lojas Renner
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PIFMF and Lojas is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Lojas Renner SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lojas Renner SA 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 Lojas Renner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lojas Renner SA has no effect on the direction of PT Indofood i.e., PT Indofood and Lojas Renner go up and down completely randomly.
Pair Corralation between PT Indofood and Lojas Renner
Assuming the 90 days horizon PT Indofood Sukses is expected to generate 0.37 times more return on investment than Lojas Renner. However, PT Indofood Sukses is 2.71 times less risky than Lojas Renner. It trades about 0.0 of its potential returns per unit of risk. Lojas Renner SA is currently generating about -0.03 per unit of risk. If you would invest 40.00 in PT Indofood Sukses on August 31, 2024 and sell it today you would lose (1.00) from holding PT Indofood Sukses or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 11.76% |
| Values | Daily Returns |
PT Indofood Sukses vs. Lojas Renner SA
Performance |
| Timeline |
| PT Indofood Sukses |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lojas Renner SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Indofood and Lojas Renner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indofood and Lojas Renner
The main advantage of trading using opposite PT Indofood and Lojas Renner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Lojas Renner 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 Lojas Renner will offset losses from the drop in Lojas Renner's long position.| PT Indofood vs. Transocean | PT Indofood vs. Sweetgreen | PT Indofood vs. Oasis Hotel Resort | PT Indofood vs. Cabo Drilling Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |