Correlation Between Indofood Sukses and AltaGas
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and AltaGas 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 Sukses and AltaGas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indofood Sukses Makmur and AltaGas, you can compare the effects of market volatilities on Indofood Sukses and AltaGas 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 Sukses with a short position of AltaGas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and AltaGas.
Diversification Opportunities for Indofood Sukses and AltaGas
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indofood and AltaGas is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas and Indofood Sukses 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 Sukses Makmur are associated (or correlated) with AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and AltaGas go up and down completely randomly.
Pair Corralation between Indofood Sukses and AltaGas
Assuming the 90 days horizon Indofood Sukses Makmur is expected to under-perform the AltaGas. In addition to that, Indofood Sukses is 3.97 times more volatile than AltaGas. It trades about -0.04 of its total potential returns per unit of risk. AltaGas is currently generating about -0.01 per unit of volatility. If you would invest 2,315 in AltaGas on November 3, 2024 and sell it today you would lose (10.00) from holding AltaGas or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indofood Sukses Makmur vs. AltaGas
Performance |
| Timeline |
| Indofood Sukses Makmur |
| AltaGas |
Indofood Sukses and AltaGas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and AltaGas
The main advantage of trading using opposite Indofood Sukses and AltaGas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, AltaGas 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 AltaGas will offset losses from the drop in AltaGas' long position.| Indofood Sukses vs. Toyo Suisan Kaisha | Indofood Sukses vs. Bank Mandiri Persero | Indofood Sukses vs. Astra International Tbk | Indofood Sukses vs. United Tractors Tbk |
| AltaGas vs. Navigator Holdings | AltaGas vs. Pembina Pipeline Corp | AltaGas vs. Marine Petroleum Trust | AltaGas vs. Dynagas LNG Partners |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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