Correlation Between INDOFOOD AGRI and Ambea AB
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and Ambea AB 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 Ambea AB 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 Ambea AB, you can compare the effects of market volatilities on INDOFOOD AGRI and Ambea AB 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 Ambea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and Ambea AB.
Diversification Opportunities for INDOFOOD AGRI and Ambea AB
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INDOFOOD and Ambea is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and Ambea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambea AB 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 Ambea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambea AB has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and Ambea AB go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and Ambea AB
Assuming the 90 days trading horizon INDOFOOD AGRI RES is expected to generate 0.98 times more return on investment than Ambea AB. However, INDOFOOD AGRI RES is 1.02 times less risky than Ambea AB. It trades about 0.01 of its potential returns per unit of risk. Ambea AB is currently generating about -0.04 per unit of risk. If you would invest 22.00 in INDOFOOD AGRI RES on October 22, 2024 and sell it today you would earn a total of 0.00 from holding INDOFOOD AGRI RES or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDOFOOD AGRI RES vs. Ambea AB
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| Ambea AB |
INDOFOOD AGRI and Ambea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and Ambea AB
The main advantage of trading using opposite INDOFOOD AGRI and Ambea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, Ambea AB 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 Ambea AB will offset losses from the drop in Ambea AB's long position.| INDOFOOD AGRI vs. HUTCHISON TELECOMM | INDOFOOD AGRI vs. CVR Medical Corp | INDOFOOD AGRI vs. Highlight Communications AG | INDOFOOD AGRI vs. Entravision Communications |
| Ambea AB vs. MOVIE GAMES SA | Ambea AB vs. Boyd Gaming | Ambea AB vs. ecotel communication ag | Ambea AB vs. GAMESTOP |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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