Correlation Between Vastland Indonesia and FKS Food
Can any of the company-specific risk be diversified away by investing in both Vastland Indonesia and FKS Food 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 Vastland Indonesia and FKS Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastland Indonesia and FKS Food Sejahtera, you can compare the effects of market volatilities on Vastland Indonesia and FKS Food 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 Vastland Indonesia with a short position of FKS Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastland Indonesia and FKS Food.
Diversification Opportunities for Vastland Indonesia and FKS Food
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vastland and FKS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Vastland Indonesia and FKS Food Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FKS Food Sejahtera and Vastland Indonesia 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 Vastland Indonesia are associated (or correlated) with FKS Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FKS Food Sejahtera has no effect on the direction of Vastland Indonesia i.e., Vastland Indonesia and FKS Food go up and down completely randomly.
Pair Corralation between Vastland Indonesia and FKS Food
Assuming the 90 days trading horizon Vastland Indonesia is expected to generate 1.82 times more return on investment than FKS Food. However, Vastland Indonesia is 1.82 times more volatile than FKS Food Sejahtera. It trades about 0.01 of its potential returns per unit of risk. FKS Food Sejahtera is currently generating about 0.01 per unit of risk. If you would invest 7,600 in Vastland Indonesia on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Vastland Indonesia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastland Indonesia vs. FKS Food Sejahtera
Performance |
| Timeline |
| Vastland Indonesia |
| FKS Food Sejahtera |
Vastland Indonesia and FKS Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastland Indonesia and FKS Food
The main advantage of trading using opposite Vastland Indonesia and FKS Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastland Indonesia position performs unexpectedly, FKS Food 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 FKS Food will offset losses from the drop in FKS Food's long position.| Vastland Indonesia vs. FKS Food Sejahtera | Vastland Indonesia vs. Anabatic Technologies Tbk | Vastland Indonesia vs. Grand Kartech Tbk | Vastland Indonesia vs. PT Hatten Bali |
| FKS Food vs. Bakrieland Development Tbk | FKS Food vs. Bakrie Brothers Tbk | FKS Food vs. Energi Mega Persada | FKS Food vs. Sampoerna Agro 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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