Correlation Between INDOFOOD AGRI and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both INDOFOOD AGRI and MCEWEN MINING 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 MCEWEN MINING 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 MCEWEN MINING INC, you can compare the effects of market volatilities on INDOFOOD AGRI and MCEWEN MINING 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 MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and MCEWEN MINING.
Diversification Opportunities for INDOFOOD AGRI and MCEWEN MINING
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INDOFOOD and MCEWEN is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC 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 MCEWEN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCEWEN MINING INC has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and MCEWEN MINING go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and MCEWEN MINING
Assuming the 90 days trading horizon INDOFOOD AGRI RES is expected to generate 0.59 times more return on investment than MCEWEN MINING. However, INDOFOOD AGRI RES is 1.71 times less risky than MCEWEN MINING. It trades about 0.04 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about -0.04 per unit of risk. If you would invest 21.00 in INDOFOOD AGRI RES on September 25, 2024 and sell it today you would earn a total of 1.00 from holding INDOFOOD AGRI RES or generate 4.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
INDOFOOD AGRI RES vs. MCEWEN MINING INC
Performance |
Timeline |
INDOFOOD AGRI RES |
MCEWEN MINING INC |
INDOFOOD AGRI and MCEWEN MINING Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with INDOFOOD AGRI and MCEWEN MINING
The main advantage of trading using opposite INDOFOOD AGRI and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, MCEWEN MINING 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 MCEWEN MINING will offset losses from the drop in MCEWEN MINING's long position.INDOFOOD AGRI vs. ON SEMICONDUCTOR | INDOFOOD AGRI vs. BE Semiconductor Industries | INDOFOOD AGRI vs. National Beverage Corp | INDOFOOD AGRI vs. UNITED UTILITIES GR |
MCEWEN MINING vs. RETAIL FOOD GROUP | MCEWEN MINING vs. ASSOC BR FOODS | MCEWEN MINING vs. Performance Food Group | MCEWEN MINING vs. AUSTEVOLL SEAFOOD |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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