Correlation Between Indofood Sukses and Tingyi Holding
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and Tingyi Holding 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 Tingyi Holding 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 Tingyi Holding Corp, you can compare the effects of market volatilities on Indofood Sukses and Tingyi Holding 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 Tingyi Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and Tingyi Holding.
Diversification Opportunities for Indofood Sukses and Tingyi Holding
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Indofood and Tingyi is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Tingyi Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tingyi Holding Corp 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 Tingyi Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tingyi Holding Corp has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Tingyi Holding go up and down completely randomly.
Pair Corralation between Indofood Sukses and Tingyi Holding
If you would invest 2,490 in Indofood Sukses Makmur on September 13, 2024 and sell it today you would earn a total of 79.00 from holding Indofood Sukses Makmur or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Indofood Sukses Makmur vs. Tingyi Holding Corp
Performance |
| Timeline |
| Indofood Sukses Makmur |
| Tingyi Holding Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Indofood Sukses and Tingyi Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and Tingyi Holding
The main advantage of trading using opposite Indofood Sukses and Tingyi Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, Tingyi Holding 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 Tingyi Holding will offset losses from the drop in Tingyi Holding'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 |
| Tingyi Holding vs. Torque Lifestyle Brands | Tingyi Holding vs. Naturally Splendid Enterprises | Tingyi Holding vs. Aryzta AG PK | Tingyi Holding vs. First Pacific |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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