Correlation Between Indofood Sukses and Leroy Seafood
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and Leroy Seafood 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 Leroy Seafood 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 Leroy Seafood Group, you can compare the effects of market volatilities on Indofood Sukses and Leroy Seafood 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 Leroy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and Leroy Seafood.
Diversification Opportunities for Indofood Sukses and Leroy Seafood
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indofood and Leroy is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Leroy Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leroy Seafood Group 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 Leroy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leroy Seafood Group has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Leroy Seafood go up and down completely randomly.
Pair Corralation between Indofood Sukses and Leroy Seafood
If you would invest 915.00 in Leroy Seafood Group on January 26, 2024 and sell it today you would earn a total of 0.00 from holding Leroy Seafood Group or generate 0.0% 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. Leroy Seafood Group
Performance |
| Timeline |
| Indofood Sukses Makmur |
| Leroy Seafood Group |
Indofood Sukses and Leroy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and Leroy Seafood
The main advantage of trading using opposite Indofood Sukses and Leroy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, Leroy Seafood 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 Leroy Seafood will offset losses from the drop in Leroy Seafood's long position.| Indofood Sukses vs. Kellanova | Indofood Sukses vs. Lancaster Colony | Indofood Sukses vs. The A2 Milk | Indofood Sukses vs. Artisan Consumer Goods |
| Leroy Seafood vs. Kellanova | Leroy Seafood vs. Lancaster Colony | Leroy Seafood vs. The A2 Milk | Leroy Seafood 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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