Correlation Between INDOFOOD AGRI and AUSNUTRIA DAIRY
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and AUSNUTRIA DAIRY 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 AGRI and AUSNUTRIA DAIRY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDOFOOD AGRI RES and AUSNUTRIA DAIRY, you can compare the effects of market volatilities on INDOFOOD AGRI and AUSNUTRIA DAIRY 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 AGRI with a short position of AUSNUTRIA DAIRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and AUSNUTRIA DAIRY.
Diversification Opportunities for INDOFOOD AGRI and AUSNUTRIA DAIRY
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INDOFOOD and AUSNUTRIA is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and AUSNUTRIA DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSNUTRIA DAIRY and INDOFOOD AGRI 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 AGRI RES are associated (or correlated) with AUSNUTRIA DAIRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSNUTRIA DAIRY has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and AUSNUTRIA DAIRY go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and AUSNUTRIA DAIRY
Assuming the 90 days trading horizon INDOFOOD AGRI is expected to generate 1.56 times less return on investment than AUSNUTRIA DAIRY. In addition to that, INDOFOOD AGRI is 1.12 times more volatile than AUSNUTRIA DAIRY. It trades about 0.04 of its total potential returns per unit of risk. AUSNUTRIA DAIRY is currently generating about 0.08 per unit of volatility. If you would invest 23.00 in AUSNUTRIA DAIRY on September 7, 2024 and sell it today you would earn a total of 2.00 from holding AUSNUTRIA DAIRY or generate 8.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
INDOFOOD AGRI RES vs. AUSNUTRIA DAIRY
Performance |
Timeline |
INDOFOOD AGRI RES |
AUSNUTRIA DAIRY |
INDOFOOD AGRI and AUSNUTRIA DAIRY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with INDOFOOD AGRI and AUSNUTRIA DAIRY
The main advantage of trading using opposite INDOFOOD AGRI and AUSNUTRIA DAIRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY will offset losses from the drop in AUSNUTRIA DAIRY's long position.INDOFOOD AGRI vs. Corporate Office Properties | INDOFOOD AGRI vs. Haier Smart Home | INDOFOOD AGRI vs. MI Homes | INDOFOOD AGRI vs. H FARM SPA |
AUSNUTRIA DAIRY vs. CDL INVESTMENT | AUSNUTRIA DAIRY vs. LANDSEA GREEN MANAGEMENT | AUSNUTRIA DAIRY vs. Perdoceo Education | AUSNUTRIA DAIRY vs. Sims Metal Management |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Stocks Directory Find actively traded stocks across global markets | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
CEOs Directory Screen CEOs from public companies around the world | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |