Correlation Between Indofood Sukses and Mind Technology
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and Mind Technology 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 Mind Technology 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 Mind Technology Pref, you can compare the effects of market volatilities on Indofood Sukses and Mind Technology 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 Mind Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and Mind Technology.
Diversification Opportunities for Indofood Sukses and Mind Technology
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indofood and Mind is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Mind Technology Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Technology Pref 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 Mind Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mind Technology Pref has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Mind Technology go up and down completely randomly.
Pair Corralation between Indofood Sukses and Mind Technology
Assuming the 90 days horizon Indofood Sukses is expected to generate 1.15 times less return on investment than Mind Technology. But when comparing it to its historical volatility, Indofood Sukses Makmur is 2.35 times less risky than Mind Technology. It trades about 0.03 of its potential returns per unit of risk. Mind Technology Pref is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 545.00 in Mind Technology Pref on September 2, 2024 and sell it today you would lose (545.00) from holding Mind Technology Pref or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.7% |
| Values | Daily Returns |
Indofood Sukses Makmur vs. Mind Technology Pref
Performance |
| Timeline |
| Indofood Sukses Makmur |
| Mind Technology Pref |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Indofood Sukses and Mind Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and Mind Technology
The main advantage of trading using opposite Indofood Sukses and Mind Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, Mind Technology 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 Mind Technology will offset losses from the drop in Mind Technology'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 |
| Mind Technology vs. Kraken Robotics | Mind Technology vs. SaverOne 2014 Ltd | Mind Technology vs. Focus Universal | Mind Technology vs. Nanalysis Scientific 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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