Correlation Between INDOFOOD AGRI and AXA SA
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and AXA SA 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 AXA SA 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 AXA SA, you can compare the effects of market volatilities on INDOFOOD AGRI and AXA SA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and AXA SA.
Diversification Opportunities for INDOFOOD AGRI and AXA SA
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INDOFOOD and AXA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and AXA SA go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and AXA SA
Assuming the 90 days trading horizon INDOFOOD AGRI RES is expected to under-perform the AXA SA. But the stock apears to be less risky and, when comparing its historical volatility, INDOFOOD AGRI RES is 1.61 times less risky than AXA SA. The stock trades about -0.21 of its potential returns per unit of risk. The AXA SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 3,440 in AXA SA on September 12, 2024 and sell it today you would lose (74.00) from holding AXA SA or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDOFOOD AGRI RES vs. AXA SA
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| AXA SA |
INDOFOOD AGRI and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and AXA SA
The main advantage of trading using opposite INDOFOOD AGRI and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.| INDOFOOD AGRI vs. SOFI TECHNOLOGIES | INDOFOOD AGRI vs. GLG LIFE TECH | INDOFOOD AGRI vs. RCM TECHNOLOGIES | INDOFOOD AGRI vs. Amkor Technology |
| AXA SA vs. QURATE RETAIL INC | AXA SA vs. Cleanaway Waste Management | AXA SA vs. Carsales | AXA SA vs. AUTO TRADER ADR |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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