Correlation Between INDOFOOD AGRI and Hisense Home
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and Hisense Home 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 Hisense Home 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 Hisense Home Appliances, you can compare the effects of market volatilities on INDOFOOD AGRI and Hisense Home 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 Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and Hisense Home.
Diversification Opportunities for INDOFOOD AGRI and Hisense Home
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between INDOFOOD and Hisense is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances 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 Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and Hisense Home go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and Hisense Home
If you would invest 287.00 in Hisense Home Appliances on September 19, 2024 and sell it today you would earn a total of 2.00 from holding Hisense Home Appliances or generate 0.7% 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. Hisense Home Appliances
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| Hisense Home Appliances |
INDOFOOD AGRI and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and Hisense Home
The main advantage of trading using opposite INDOFOOD AGRI and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, Hisense Home 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 Hisense Home will offset losses from the drop in Hisense Home's long position.| INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Apple Inc |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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