Correlation Between INDOFOOD AGRI and MAVEN WIRELESS
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and MAVEN WIRELESS 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 MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN, you can compare the effects of market volatilities on INDOFOOD AGRI and MAVEN WIRELESS 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 MAVEN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and MAVEN WIRELESS.
Diversification Opportunities for INDOFOOD AGRI and MAVEN WIRELESS
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between INDOFOOD and MAVEN is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and MAVEN WIRELESS go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and MAVEN WIRELESS
Assuming the 90 days trading horizon INDOFOOD AGRI RES is expected to generate 0.77 times more return on investment than MAVEN WIRELESS. However, INDOFOOD AGRI RES is 1.29 times less risky than MAVEN WIRELESS. It trades about -0.14 of its potential returns per unit of risk. MAVEN WIRELESS SWEDEN is currently generating about -0.26 per unit of risk. If you would invest 22.00 in INDOFOOD AGRI RES on November 27, 2024 and sell it today you would lose (2.00) from holding INDOFOOD AGRI RES or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDOFOOD AGRI RES vs. MAVEN WIRELESS SWEDEN
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| MAVEN WIRELESS SWEDEN |
INDOFOOD AGRI and MAVEN WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and MAVEN WIRELESS
The main advantage of trading using opposite INDOFOOD AGRI and MAVEN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, MAVEN WIRELESS 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 MAVEN WIRELESS will offset losses from the drop in MAVEN WIRELESS's long position.| INDOFOOD AGRI vs. THAI BEVERAGE | INDOFOOD AGRI vs. BIOPHARMA CREDIT DL | INDOFOOD AGRI vs. Carnegie Clean Energy | INDOFOOD AGRI vs. Discover Financial Services |
| MAVEN WIRELESS vs. T Mobile | MAVEN WIRELESS vs. China Mobile Limited | MAVEN WIRELESS vs. Verizon Communications | MAVEN WIRELESS vs. ATT Inc |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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