Correlation Between PT Indofood and Musclepharm Corp

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

Diversification Opportunities for PT Indofood and Musclepharm Corp

0.0

Correlation Coefficient

PT Indofood  Musclepharm Corp

Pay attention - limited upside

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

Pair Corralation between PT Indofood and Musclepharm Corp

If you would invest  43.00  in PT Indofood Sukses on February 3, 2024 and sell it today you would earn a total of  2.00  from holding PT Indofood Sukses or generate 4.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.21%
Values	Daily Returns

PT Indofood Sukses  vs.  Musclepharm Corp

PT Indofood Sukses

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Indofood Sukses are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, PT Indofood may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Musclepharm Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Musclepharm Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Musclepharm Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PT Indofood and Musclepharm Corp

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

The idea behind PT Indofood Sukses and Musclepharm Corp 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.