Correlation Between INDOFOOD AGRI and TTW Public
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and TTW Public 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 TTW Public 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 TTW Public, you can compare the effects of market volatilities on INDOFOOD AGRI and TTW Public 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 TTW Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and TTW Public.
Diversification Opportunities for INDOFOOD AGRI and TTW Public
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INDOFOOD and TTW is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and TTW Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTW Public 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 TTW Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTW Public has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and TTW Public go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and TTW Public
Assuming the 90 days trading horizon INDOFOOD AGRI RES is expected to generate 0.88 times more return on investment than TTW Public. However, INDOFOOD AGRI RES is 1.14 times less risky than TTW Public. It trades about 0.03 of its potential returns per unit of risk. TTW Public is currently generating about 0.02 per unit of risk. If you would invest 18.00 in INDOFOOD AGRI RES on September 12, 2024 and sell it today you would earn a total of 4.00 from holding INDOFOOD AGRI RES or generate 22.22% 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. TTW Public
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| TTW Public |
INDOFOOD AGRI and TTW Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and TTW Public
The main advantage of trading using opposite INDOFOOD AGRI and TTW Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, TTW Public 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 TTW Public will offset losses from the drop in TTW Public's long position.| INDOFOOD AGRI vs. SOFI TECHNOLOGIES | INDOFOOD AGRI vs. GLG LIFE TECH | INDOFOOD AGRI vs. RCM TECHNOLOGIES | INDOFOOD AGRI vs. Amkor Technology |
| TTW Public vs. Penn National Gaming | TTW Public vs. Games Workshop Group | TTW Public vs. Pembina Pipeline Corp | TTW Public vs. ALERION CLEANPOWER |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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