Correlation Between IBEX Technologies and PT Indofood

Can any of the company-specific risk be diversified away by investing in both IBEX Technologies and PT Indofood 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 IBEX Technologies and PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IBEX Technologies and PT Indofood Sukses, you can compare the effects of market volatilities on IBEX Technologies and PT Indofood 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 IBEX Technologies with a short position of PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX Technologies and PT Indofood.

Diversification Opportunities for IBEX Technologies and PT Indofood

0.58

Correlation Coefficient

IBEX Technologies  PT Indofood

Very weak diversification

The 3 months correlation between IBEX and ISM is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding IBEX Technologies and PT Indofood Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indofood Sukses and IBEX Technologies 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 IBEX Technologies are associated (or correlated) with PT Indofood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indofood Sukses has no effect on the direction of IBEX Technologies i.e., IBEX Technologies and PT Indofood go up and down completely randomly.

Pair Corralation between IBEX Technologies and PT Indofood

Assuming the 90 days horizon IBEX Technologies is expected to generate 10.84 times more return on investment than PT Indofood. However, IBEX Technologies is 10.84 times more volatile than PT Indofood Sukses. It trades about 0.05 of its potential returns per unit of risk. PT Indofood Sukses is currently generating about 0.02 per unit of risk. If you would invest  54.00  in IBEX Technologies on September 24, 2024 and sell it today you would earn a total of  68,346  from holding IBEX Technologies or generate 126566.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

IBEX Technologies  vs.  PT Indofood Sukses

IBEX Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IBEX Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IBEX Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PT Indofood Sukses

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Indofood Sukses are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PT Indofood may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with IBEX Technologies and PT Indofood

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

The idea behind IBEX Technologies and PT Indofood Sukses 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.