Correlation Between PT Indofood and China Vanke
Can any of the company-specific risk be diversified away by investing in both PT Indofood and China Vanke 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 China Vanke 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 China Vanke Co, you can compare the effects of market volatilities on PT Indofood and China Vanke 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 China Vanke. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and China Vanke.
Diversification Opportunities for PT Indofood and China Vanke
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between PIFMF and China is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and China Vanke Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Vanke 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 China Vanke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Vanke has no effect on the direction of PT Indofood i.e., PT Indofood and China Vanke go up and down completely randomly.
Pair Corralation between PT Indofood and China Vanke
If you would invest 53.00 in China Vanke Co on February 23, 2024 and sell it today you would earn a total of 34.00 from holding China Vanke Co or generate 64.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PT Indofood Sukses vs. China Vanke Co
Performance |
Timeline |
PT Indofood Sukses |
China Vanke |
PT Indofood and China Vanke Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Indofood and China Vanke
The main advantage of trading using opposite PT Indofood and China Vanke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, China Vanke 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 China Vanke will offset losses from the drop in China Vanke's long position.PT Indofood vs. Nichirei | PT Indofood vs. Kellanova | PT Indofood vs. Lancaster Colony | PT Indofood vs. The A2 Milk |
China Vanke vs. Carson Development | China Vanke vs. Sun Hung Kai | China Vanke vs. Sun Hung Kai | China Vanke vs. China Overseas Land |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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