Correlation Between INDOFOOD AGRI and Chuangs China
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and Chuangs China 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 Chuangs China 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 Chuangs China Investments, you can compare the effects of market volatilities on INDOFOOD AGRI and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and Chuangs China.
Diversification Opportunities for INDOFOOD AGRI and Chuangs China
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between INDOFOOD and Chuangs is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and Chuangs China go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and Chuangs China
If you would invest 21.00 in INDOFOOD AGRI RES on August 30, 2024 and sell it today you would earn a total of 1.00 from holding INDOFOOD AGRI RES or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDOFOOD AGRI RES vs. Chuangs China Investments
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| Chuangs China Investments |
INDOFOOD AGRI and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and Chuangs China
The main advantage of trading using opposite INDOFOOD AGRI and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China'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 |
| Chuangs China vs. Playtech plc | Chuangs China vs. KOOL2PLAY SA ZY | Chuangs China vs. PLAYSTUDIOS A DL 0001 | Chuangs China vs. ANTA SPORTS PRODUCT |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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