Correlation Between Indofood Sukses and Mas Murni

Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and Mas Murni 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 Mas Murni 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 Mas Murni Indonesia, you can compare the effects of market volatilities on Indofood Sukses and Mas Murni 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 Mas Murni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and Mas Murni.

Diversification Opportunities for Indofood Sukses and Mas Murni

0.0

Correlation Coefficient

Indofood Sukses  Mas Murni

Pay attention - limited upside

The 3 months correlation between Indofood and Mas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Mas Murni Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mas Murni Indonesia 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 Mas Murni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mas Murni Indonesia has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Mas Murni go up and down completely randomly.

Pair Corralation between Indofood Sukses and Mas Murni

If you would invest  5,000  in Mas Murni Indonesia on February 5, 2024 and sell it today you would earn a total of  0.00  from holding Mas Murni Indonesia or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.06%
Values	Daily Returns

Indofood Sukses Makmur  vs.  Mas Murni Indonesia

Indofood Sukses Makmur

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indofood Sukses Makmur has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Indofood Sukses is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Mas Murni Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mas Murni Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Mas Murni is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Indofood Sukses and Mas Murni

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

The idea behind Indofood Sukses Makmur and Mas Murni Indonesia 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.

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 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.