Correlation Between Indofood Sukses and Intel
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on Indofood Sukses and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and Intel.
Diversification Opportunities for Indofood Sukses and Intel
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indofood and Intel is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Intel go up and down completely randomly.
Pair Corralation between Indofood Sukses and Intel
Assuming the 90 days horizon Indofood Sukses Makmur is expected to under-perform the Intel. But the pink sheet apears to be less risky and, when comparing its historical volatility, Indofood Sukses Makmur is 1.09 times less risky than Intel. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Intel is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,532 in Intel on January 25, 2024 and sell it today you would lose (82.00) from holding Intel or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Indofood Sukses Makmur vs. Intel
Performance |
| Timeline |
| Indofood Sukses Makmur |
| Intel |
Indofood Sukses and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and Intel
The main advantage of trading using opposite Indofood Sukses and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Indofood Sukses vs. Nichirei | Indofood Sukses vs. Kellanova | Indofood Sukses vs. Lancaster Colony | Indofood Sukses vs. The A2 Milk |
| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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