Correlation Between Indofood Sukses and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and JPMorgan Chase 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 JPMorgan Chase 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 JPMorgan Chase Co, you can compare the effects of market volatilities on Indofood Sukses and JPMorgan Chase 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 JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and JPMorgan Chase.
Diversification Opportunities for Indofood Sukses and JPMorgan Chase
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indofood and JPMorgan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase 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 JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Indofood Sukses and JPMorgan Chase
Assuming the 90 days horizon Indofood Sukses Makmur is expected to under-perform the JPMorgan Chase. In addition to that, Indofood Sukses is 2.31 times more volatile than JPMorgan Chase Co. It trades about -0.02 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.14 per unit of volatility. If you would invest 13,185 in JPMorgan Chase Co on January 19, 2024 and sell it today you would earn a total of 4,940 from holding JPMorgan Chase Co or generate 37.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indofood Sukses Makmur vs. JPMorgan Chase Co
Performance |
| Timeline |
| Indofood Sukses Makmur |
| JPMorgan Chase |
Indofood Sukses and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and JPMorgan Chase
The main advantage of trading using opposite Indofood Sukses and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, JPMorgan Chase 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 JPMorgan Chase will offset losses from the drop in JPMorgan Chase's long position.| Indofood Sukses vs. Kellanova | Indofood Sukses vs. Lancaster Colony | Indofood Sukses vs. The A2 Milk | Indofood Sukses vs. Altavoz Entertainment |
| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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