Correlation Between INDOFOOD AGRI and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and Benchmark Electronics 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 Benchmark Electronics 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 Benchmark Electronics, you can compare the effects of market volatilities on INDOFOOD AGRI and Benchmark Electronics 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 Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and Benchmark Electronics.
Diversification Opportunities for INDOFOOD AGRI and Benchmark Electronics
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INDOFOOD and Benchmark is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics 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 Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and Benchmark Electronics go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and Benchmark Electronics
If you would invest 22.00 in INDOFOOD AGRI RES on September 24, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDOFOOD AGRI RES vs. Benchmark Electronics
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| Benchmark Electronics |
INDOFOOD AGRI and Benchmark Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and Benchmark Electronics
The main advantage of trading using opposite INDOFOOD AGRI and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, Benchmark Electronics 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.| INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Microsoft |
| Benchmark Electronics vs. Charoen Pokphand Foods | Benchmark Electronics vs. Jacquet Metal Service | Benchmark Electronics vs. CN MODERN DAIRY | Benchmark Electronics vs. INDOFOOD AGRI RES |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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