Correlation Between INDOFOOD AGRI and Public Storage
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on INDOFOOD AGRI and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and Public Storage.
Diversification Opportunities for INDOFOOD AGRI and Public Storage
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between INDOFOOD and Public is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and Public Storage go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and Public Storage
Assuming the 90 days trading horizon INDOFOOD AGRI is expected to generate 1.79 times less return on investment than Public Storage. In addition to that, INDOFOOD AGRI is 1.62 times more volatile than Public Storage. It trades about 0.05 of its total potential returns per unit of risk. Public Storage is currently generating about 0.16 per unit of volatility. If you would invest 24,289 in Public Storage on September 3, 2024 and sell it today you would earn a total of 9,031 from holding Public Storage or generate 37.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDOFOOD AGRI RES vs. Public Storage
Performance |
| Timeline |
| INDOFOOD AGRI RES |
| Public Storage |
INDOFOOD AGRI and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOFOOD AGRI and Public Storage
The main advantage of trading using opposite INDOFOOD AGRI and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| INDOFOOD AGRI vs. TOTAL GABON | INDOFOOD AGRI vs. Walgreens Boots Alliance | INDOFOOD AGRI vs. Peak Resources Limited |
| Public Storage vs. SBA Communications Corp | Public Storage vs. INTERSHOP Communications Aktiengesellschaft | Public Storage vs. Cass Information Systems | Public Storage vs. Citic Telecom International |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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