Correlation Between Indofood Sukses and Tokyu
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and Tokyu 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 Tokyu 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 Tokyu, you can compare the effects of market volatilities on Indofood Sukses and Tokyu 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 Tokyu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and Tokyu.
Diversification Opportunities for Indofood Sukses and Tokyu
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indofood and Tokyu is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Tokyu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu 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 Tokyu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Tokyu go up and down completely randomly.
Pair Corralation between Indofood Sukses and Tokyu
Assuming the 90 days horizon Indofood Sukses Makmur is expected to generate 3.31 times more return on investment than Tokyu. However, Indofood Sukses is 3.31 times more volatile than Tokyu. It trades about 0.02 of its potential returns per unit of risk. Tokyu is currently generating about -0.07 per unit of risk. If you would invest 2,300 in Indofood Sukses Makmur on August 31, 2024 and sell it today you would earn a total of 189.00 from holding Indofood Sukses Makmur or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 68.72% |
| Values | Daily Returns |
Indofood Sukses Makmur vs. Tokyu
Performance |
| Timeline |
| Indofood Sukses Makmur |
| Tokyu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Indofood Sukses and Tokyu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and Tokyu
The main advantage of trading using opposite Indofood Sukses and Tokyu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, Tokyu 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 Tokyu will offset losses from the drop in Tokyu'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 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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