Correlation Between Indofood Sukses and Calbee
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and Calbee 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 Sukses and Calbee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indofood Sukses Makmur and Calbee Inc, you can compare the effects of market volatilities on Indofood Sukses and Calbee 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 Sukses with a short position of Calbee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and Calbee.
Diversification Opportunities for Indofood Sukses and Calbee
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indofood and Calbee is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Calbee Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calbee Inc and Indofood Sukses 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 Sukses Makmur are associated (or correlated) with Calbee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calbee Inc has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Calbee go up and down completely randomly.
Pair Corralation between Indofood Sukses and Calbee
Assuming the 90 days horizon Indofood Sukses Makmur is expected to under-perform the Calbee. But the pink sheet apears to be less risky and, when comparing its historical volatility, Indofood Sukses Makmur is 1.19 times less risky than Calbee. The pink sheet trades about -0.18 of its potential returns per unit of risk. The Calbee Inc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 568.00 in Calbee Inc on January 25, 2024 and sell it today you would lose (9.00) from holding Calbee Inc or give up 1.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indofood Sukses Makmur vs. Calbee Inc
Performance |
| Timeline |
| Indofood Sukses Makmur |
| Calbee Inc |
Indofood Sukses and Calbee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and Calbee
The main advantage of trading using opposite Indofood Sukses and Calbee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, Calbee 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 Calbee will offset losses from the drop in Calbee's long position.| Indofood Sukses vs. Kellanova | Indofood Sukses vs. Lancaster Colony | Indofood Sukses vs. The A2 Milk | Indofood Sukses vs. Artisan Consumer Goods |
| Calbee vs. Kellanova | Calbee vs. Lancaster Colony | Calbee vs. The A2 Milk | Calbee vs. Artisan Consumer Goods |
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 CEOs Directory module to screen CEOs from public companies around the world.
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