Correlation Between INDOFOOD AGRI and G III
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and G III 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 G III 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 G III Apparel Group, you can compare the effects of market volatilities on INDOFOOD AGRI and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and G III.
Diversification Opportunities for INDOFOOD AGRI and G III
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INDOFOOD and GI4 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and G III go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and G III
Assuming the 90 days trading horizon INDOFOOD AGRI RES is expected to generate 1.22 times more return on investment than G III. However, INDOFOOD AGRI is 1.22 times more volatile than G III Apparel Group. It trades about -0.14 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.24 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDOFOOD AGRI RES vs. G III Apparel Group
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| G III Apparel |
INDOFOOD AGRI and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and G III
The main advantage of trading using opposite INDOFOOD AGRI and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, G III 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 G III will offset losses from the drop in G III'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 |
| G III vs. Gol Intelligent Airlines | G III vs. Singapore Airlines Limited | G III vs. Algonquin Power Utilities | G III vs. Dentsply Sirona |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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