Correlation Between Tsingtao Brewery and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery 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 Tsingtao Brewery and PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and PT Indofood Sukses, you can compare the effects of market volatilities on Tsingtao Brewery 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 Tsingtao Brewery with a short position of PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and PT Indofood.
Diversification Opportunities for Tsingtao Brewery and PT Indofood
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tsingtao and ISM is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery 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 Tsingtao Brewery 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 Tsingtao Brewery 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 Tsingtao Brewery i.e., Tsingtao Brewery and PT Indofood go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and PT Indofood
Assuming the 90 days trading horizon Tsingtao Brewery is expected to generate 0.85 times more return on investment than PT Indofood. However, Tsingtao Brewery is 1.18 times less risky than PT Indofood. It trades about 0.03 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 508.00 in Tsingtao Brewery on September 25, 2024 and sell it today you would earn a total of 152.00 from holding Tsingtao Brewery or generate 29.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. PT Indofood Sukses
Performance |
| Timeline |
| Tsingtao Brewery |
| PT Indofood Sukses |
Tsingtao Brewery and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and PT Indofood
The main advantage of trading using opposite Tsingtao Brewery and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery 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.| Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Apple Inc | Tsingtao Brewery vs. Microsoft |
| PT Indofood vs. Mowi ASA | PT Indofood vs. LEROY SEAFOOD GRUNSPADR | PT Indofood vs. Lery Seafood Group | PT Indofood vs. Nisshin Seifun Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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