Correlation Between Sampoerna Agro and Indofood Cbp
Can any of the company-specific risk be diversified away by investing in both Sampoerna Agro and Indofood Cbp 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 Sampoerna Agro and Indofood Cbp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampoerna Agro Tbk and Indofood Cbp Sukses, you can compare the effects of market volatilities on Sampoerna Agro and Indofood Cbp 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 Sampoerna Agro with a short position of Indofood Cbp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampoerna Agro and Indofood Cbp.
Diversification Opportunities for Sampoerna Agro and Indofood Cbp
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sampoerna and Indofood is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sampoerna Agro Tbk and Indofood Cbp Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indofood Cbp Sukses and Sampoerna Agro 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 Sampoerna Agro Tbk are associated (or correlated) with Indofood Cbp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indofood Cbp Sukses has no effect on the direction of Sampoerna Agro i.e., Sampoerna Agro and Indofood Cbp go up and down completely randomly.
Pair Corralation between Sampoerna Agro and Indofood Cbp
Assuming the 90 days trading horizon Sampoerna Agro Tbk is expected to generate 0.5 times more return on investment than Indofood Cbp. However, Sampoerna Agro Tbk is 2.01 times less risky than Indofood Cbp. It trades about 0.25 of its potential returns per unit of risk. Indofood Cbp Sukses is currently generating about 0.08 per unit of risk. If you would invest 220,000 in Sampoerna Agro Tbk on January 23, 2025 and sell it today you would earn a total of 11,000 from holding Sampoerna Agro Tbk or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampoerna Agro Tbk vs. Indofood Cbp Sukses
Performance |
| Timeline |
| Sampoerna Agro Tbk |
| Indofood Cbp Sukses |
Sampoerna Agro and Indofood Cbp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampoerna Agro and Indofood Cbp
The main advantage of trading using opposite Sampoerna Agro and Indofood Cbp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampoerna Agro position performs unexpectedly, Indofood Cbp 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 Indofood Cbp will offset losses from the drop in Indofood Cbp's long position.| Sampoerna Agro vs. Bakrie Sumatera Plantations | Sampoerna Agro vs. Perusahaan Perkebunan London | Sampoerna Agro vs. Astra Agro Lestari | Sampoerna Agro vs. Tunas Baru Lampung |
| Indofood Cbp vs. Unilever Indonesia Tbk | Indofood Cbp vs. PT Indofood Sukses | Indofood Cbp vs. Astra International Tbk | Indofood Cbp vs. Telkom Indonesia 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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