Correlation Between Indofood Sukses and Universal Robina
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and Universal Robina 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 Universal Robina 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 Universal Robina Corp, you can compare the effects of market volatilities on Indofood Sukses and Universal Robina 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 Universal Robina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and Universal Robina.
Diversification Opportunities for Indofood Sukses and Universal Robina
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indofood and Universal is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Universal Robina Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Robina Corp 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 Universal Robina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Robina Corp has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Universal Robina go up and down completely randomly.
Pair Corralation between Indofood Sukses and Universal Robina
Assuming the 90 days horizon Indofood Sukses is expected to generate 2.57 times less return on investment than Universal Robina. But when comparing it to its historical volatility, Indofood Sukses Makmur is 2.14 times less risky than Universal Robina. It trades about 0.01 of its potential returns per unit of risk. Universal Robina Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,319 in Universal Robina Corp on December 30, 2023 and sell it today you would lose (259.00) from holding Universal Robina Corp or give up 11.17% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 97.77% |
Values | Daily Returns |
Indofood Sukses Makmur vs. Universal Robina Corp
Performance |
Timeline |
Indofood Sukses Makmur |
Universal Robina Corp |
Indofood Sukses and Universal Robina Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Indofood Sukses and Universal Robina
The main advantage of trading using opposite Indofood Sukses and Universal Robina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, Universal Robina 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 Universal Robina will offset losses from the drop in Universal Robina's long position.Indofood Sukses vs. Kraft Heinz Co | Indofood Sukses vs. General Mills | Indofood Sukses vs. Danone PK | Indofood Sukses vs. Kellanova |
Universal Robina vs. Kraft Heinz Co | Universal Robina vs. General Mills | Universal Robina vs. Danone PK | Universal Robina vs. Kellanova |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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