Correlation Between Wetouch Technology and Indofood CBP
Can any of the company-specific risk be diversified away by investing in both Wetouch Technology 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 Wetouch Technology and Indofood CBP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wetouch Technology Common and Indofood CBP Sukses, you can compare the effects of market volatilities on Wetouch Technology 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 Wetouch Technology with a short position of Indofood CBP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wetouch Technology and Indofood CBP.
Diversification Opportunities for Wetouch Technology and Indofood CBP
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wetouch and Indofood is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Wetouch Technology Common 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 Wetouch Technology 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 Wetouch Technology Common 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 Wetouch Technology i.e., Wetouch Technology and Indofood CBP go up and down completely randomly.
Pair Corralation between Wetouch Technology and Indofood CBP
Given the investment horizon of 90 days Wetouch Technology Common is expected to generate 1.59 times more return on investment than Indofood CBP. However, Wetouch Technology is 1.59 times more volatile than Indofood CBP Sukses. It trades about 0.13 of its potential returns per unit of risk. Indofood CBP Sukses is currently generating about -0.21 per unit of risk. If you would invest 155.00 in Wetouch Technology Common on September 14, 2024 and sell it today you would earn a total of 14.00 from holding Wetouch Technology Common or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Wetouch Technology Common vs. Indofood CBP Sukses
Performance |
| Timeline |
| Wetouch Technology Common |
| Indofood CBP Sukses |
Wetouch Technology and Indofood CBP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wetouch Technology and Indofood CBP
The main advantage of trading using opposite Wetouch Technology and Indofood CBP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wetouch Technology 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.| Wetouch Technology vs. Western Capital Resources | Wetouch Technology vs. Tree Island Steel | Wetouch Technology vs. Santeon Group | Wetouch Technology vs. Ferrexpo PLC |
| Indofood CBP vs. Indofood Sukses Makmur | Indofood CBP vs. First Pacific | Indofood CBP vs. Grupo Herdez SAB | Indofood CBP vs. Fraser and Neave |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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