Correlation Between PT Indofood and Southern Concepts

Can any of the company-specific risk be diversified away by investing in both PT Indofood and Southern Concepts 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 PT Indofood and Southern Concepts into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Indofood Sukses and Southern Concepts Restaurant, you can compare the effects of market volatilities on PT Indofood and Southern Concepts 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 PT Indofood with a short position of Southern Concepts. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Southern Concepts.

Diversification Opportunities for PT Indofood and Southern Concepts

-1.0

Correlation Coefficient

PT Indofood  Southern Concepts

Pay attention - limited upside

The 3 months correlation between PIFMF and Southern is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Southern Concepts Restaurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Concepts and PT Indofood 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 PT Indofood Sukses are associated (or correlated) with Southern Concepts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Concepts has no effect on the direction of PT Indofood i.e., PT Indofood and Southern Concepts go up and down completely randomly.

Pair Corralation between PT Indofood and Southern Concepts

If you would invest  0.01  in Southern Concepts Restaurant on May 1, 2025 and sell it today you would earn a total of  0.00  from holding Southern Concepts Restaurant or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Strong
Accuracy	68.25%
Values	Daily Returns

PT Indofood Sukses  vs.  Southern Concepts Restaurant

PT Indofood Sukses

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Indofood Sukses has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, PT Indofood is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Southern Concepts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Southern Concepts Restaurant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Southern Concepts is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PT Indofood and Southern Concepts

The main advantage of trading using opposite PT Indofood and Southern Concepts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Southern Concepts 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 Southern Concepts will offset losses from the drop in Southern Concepts' long position.

The idea behind PT Indofood Sukses and Southern Concepts Restaurant pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.