Correlation Between INDOFOOD AGRI and HF FOODS
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and HF FOODS 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 INDOFOOD AGRI and HF FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDOFOOD AGRI RES and HF FOODS GRP, you can compare the effects of market volatilities on INDOFOOD AGRI and HF FOODS 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 INDOFOOD AGRI with a short position of HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and HF FOODS.
Diversification Opportunities for INDOFOOD AGRI and HF FOODS
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INDOFOOD and 3GX is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and HF FOODS GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF FOODS GRP and INDOFOOD AGRI 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 INDOFOOD AGRI RES are associated (or correlated) with HF FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF FOODS GRP has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and HF FOODS go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and HF FOODS
Assuming the 90 days trading horizon INDOFOOD AGRI is expected to generate 2.14 times less return on investment than HF FOODS. In addition to that, INDOFOOD AGRI is 1.34 times more volatile than HF FOODS GRP. It trades about 0.09 of its total potential returns per unit of risk. HF FOODS GRP is currently generating about 0.27 per unit of volatility. If you would invest 306.00 in HF FOODS GRP on August 30, 2024 and sell it today you would earn a total of 36.00 from holding HF FOODS GRP or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDOFOOD AGRI RES vs. HF FOODS GRP
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| HF FOODS GRP |
INDOFOOD AGRI and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and HF FOODS
The main advantage of trading using opposite INDOFOOD AGRI and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, HF FOODS 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 HF FOODS will offset losses from the drop in HF FOODS's long position.| INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Superior Plus Corp | INDOFOOD AGRI vs. SIVERS SEMICONDUCTORS AB |
| HF FOODS vs. Superior Plus Corp | HF FOODS vs. SIVERS SEMICONDUCTORS AB | HF FOODS vs. Talanx AG | HF FOODS vs. 2G ENERGY |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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