Correlation Between Indofood Sukses and Inpex Corp
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and Inpex Corp 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 Inpex Corp 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 Inpex Corp ADR, you can compare the effects of market volatilities on Indofood Sukses and Inpex Corp 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 Inpex Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and Inpex Corp.
Diversification Opportunities for Indofood Sukses and Inpex Corp
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indofood and Inpex is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Inpex Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpex Corp ADR 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 Inpex Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpex Corp ADR has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Inpex Corp go up and down completely randomly.
Pair Corralation between Indofood Sukses and Inpex Corp
Assuming the 90 days horizon Indofood Sukses Makmur is expected to generate 1.33 times more return on investment than Inpex Corp. However, Indofood Sukses is 1.33 times more volatile than Inpex Corp ADR. It trades about 0.04 of its potential returns per unit of risk. Inpex Corp ADR is currently generating about 0.0 per unit of risk. If you would invest 1,979 in Indofood Sukses Makmur on August 26, 2024 and sell it today you would earn a total of 430.00 from holding Indofood Sukses Makmur or generate 21.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indofood Sukses Makmur vs. Inpex Corp ADR
Performance |
| Timeline |
| Indofood Sukses Makmur |
| Inpex Corp ADR |
Indofood Sukses and Inpex Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and Inpex Corp
The main advantage of trading using opposite Indofood Sukses and Inpex Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, Inpex Corp 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 Inpex Corp will offset losses from the drop in Inpex Corp's 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 |
| Inpex Corp vs. San Leon Energy | Inpex Corp vs. Enwell Energy plc | Inpex Corp vs. Dno ASA | Inpex Corp vs. Questerre Energy |
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 CEOs Directory module to screen CEOs from public companies around the world.
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