Correlation Between PT Indofood and Bukit Uluwatu
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Bukit Uluwatu 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 Bukit Uluwatu 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 Bukit Uluwatu Villa, you can compare the effects of market volatilities on PT Indofood and Bukit Uluwatu 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 Bukit Uluwatu. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Bukit Uluwatu.
Diversification Opportunities for PT Indofood and Bukit Uluwatu
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INDF and Bukit is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Bukit Uluwatu Villa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Uluwatu Villa 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 Bukit Uluwatu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Uluwatu Villa has no effect on the direction of PT Indofood i.e., PT Indofood and Bukit Uluwatu go up and down completely randomly.
Pair Corralation between PT Indofood and Bukit Uluwatu
Assuming the 90 days trading horizon PT Indofood Sukses is expected to generate 0.33 times more return on investment than Bukit Uluwatu. However, PT Indofood Sukses is 3.01 times less risky than Bukit Uluwatu. It trades about 0.15 of its potential returns per unit of risk. Bukit Uluwatu Villa is currently generating about 0.04 per unit of risk. If you would invest 715,000 in PT Indofood Sukses on September 12, 2024 and sell it today you would earn a total of 105,000 from holding PT Indofood Sukses or generate 14.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PT Indofood Sukses vs. Bukit Uluwatu Villa
Performance |
Timeline |
PT Indofood Sukses |
Bukit Uluwatu Villa |
PT Indofood and Bukit Uluwatu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Indofood and Bukit Uluwatu
The main advantage of trading using opposite PT Indofood and Bukit Uluwatu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Bukit Uluwatu 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 Bukit Uluwatu will offset losses from the drop in Bukit Uluwatu's long position.PT Indofood vs. Austindo Nusantara Jaya | PT Indofood vs. Garudafood Putra Putri | PT Indofood vs. Provident Agro Tbk | PT Indofood vs. Dharma Satya Nusantara |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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