Correlation Between Super Energy and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Super Energy and PT Indofood 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 Super Energy and PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Super Energy Tbk and PT Indofood Sukses, you can compare the effects of market volatilities on Super Energy and PT Indofood 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 Super Energy with a short position of PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Energy and PT Indofood.
Diversification Opportunities for Super Energy and PT Indofood
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Super and INDF is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Super Energy Tbk and PT Indofood Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indofood Sukses and Super Energy 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 Super Energy Tbk are associated (or correlated) with PT Indofood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indofood Sukses has no effect on the direction of Super Energy i.e., Super Energy and PT Indofood go up and down completely randomly.
Pair Corralation between Super Energy and PT Indofood
Assuming the 90 days trading horizon Super Energy Tbk is expected to generate 2.2 times more return on investment than PT Indofood. However, Super Energy is 2.2 times more volatile than PT Indofood Sukses. It trades about 0.02 of its potential returns per unit of risk. PT Indofood Sukses is currently generating about 0.03 per unit of risk. If you would invest 231,000 in Super Energy Tbk on August 29, 2024 and sell it today you would lose (1,000.00) from holding Super Energy Tbk or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Energy Tbk vs. PT Indofood Sukses
Performance |
| Timeline |
| Super Energy Tbk |
| PT Indofood Sukses |
Super Energy and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Energy and PT Indofood
The main advantage of trading using opposite Super Energy and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Energy position performs unexpectedly, PT Indofood 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 PT Indofood will offset losses from the drop in PT Indofood's long position.| Super Energy vs. Transcoal Pacific Tbk | Super Energy vs. Sillo Maritime Perdana | Super Energy vs. Pollux Properti Indonesia | Super Energy vs. Mahkota Group Tbk |
| PT Indofood vs. Astra International Tbk | PT Indofood vs. Unilever Indonesia Tbk | PT Indofood vs. Telkom Indonesia Tbk | PT Indofood vs. Bank Mandiri Persero |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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