Correlation Between Indofood Sukses and Appswarm
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and Appswarm 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 Appswarm 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 Appswarm, you can compare the effects of market volatilities on Indofood Sukses and Appswarm 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 Appswarm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and Appswarm.
Diversification Opportunities for Indofood Sukses and Appswarm
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indofood and Appswarm is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Appswarm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appswarm 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 Appswarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appswarm has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Appswarm go up and down completely randomly.
Pair Corralation between Indofood Sukses and Appswarm
Assuming the 90 days horizon Indofood Sukses is expected to generate 17.99 times less return on investment than Appswarm. But when comparing it to its historical volatility, Indofood Sukses Makmur is 6.37 times less risky than Appswarm. It trades about 0.05 of its potential returns per unit of risk. Appswarm is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Appswarm on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Appswarm or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Indofood Sukses Makmur vs. Appswarm
Performance |
| Timeline |
| Indofood Sukses Makmur |
| Appswarm |
Indofood Sukses and Appswarm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and Appswarm
The main advantage of trading using opposite Indofood Sukses and Appswarm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, Appswarm 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 Appswarm will offset losses from the drop in Appswarm's long position.| Indofood Sukses vs. The Planting Hope | Indofood Sukses vs. Else Nutrition Holdings | Indofood Sukses vs. Steakholder Foods | Indofood Sukses vs. Laird Superfood |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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