Correlation Between PT Indofood and Lautan Luas
Can any of the company-specific risk be diversified away by investing in both PT Indofood and Lautan Luas 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 Lautan Luas 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 Lautan Luas Tbk, you can compare the effects of market volatilities on PT Indofood and Lautan Luas 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 Lautan Luas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and Lautan Luas.
Diversification Opportunities for PT Indofood and Lautan Luas
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between INDF and Lautan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and Lautan Luas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lautan Luas Tbk 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 Lautan Luas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lautan Luas Tbk has no effect on the direction of PT Indofood i.e., PT Indofood and Lautan Luas go up and down completely randomly.
Pair Corralation between PT Indofood and Lautan Luas
Assuming the 90 days trading horizon PT Indofood Sukses is expected to generate 0.93 times more return on investment than Lautan Luas. However, PT Indofood Sukses is 1.08 times less risky than Lautan Luas. It trades about 0.04 of its potential returns per unit of risk. Lautan Luas Tbk is currently generating about -0.04 per unit of risk. If you would invest 565,904 in PT Indofood Sukses on December 1, 2024 and sell it today you would earn a total of 141,596 from holding PT Indofood Sukses or generate 25.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.57% |
Values | Daily Returns |
PT Indofood Sukses vs. Lautan Luas Tbk
Performance |
Timeline |
PT Indofood Sukses |
Lautan Luas Tbk |
PT Indofood and Lautan Luas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Indofood and Lautan Luas
The main advantage of trading using opposite PT Indofood and Lautan Luas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indofood position performs unexpectedly, Lautan Luas 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 Lautan Luas will offset losses from the drop in Lautan Luas' long position.PT Indofood vs. Astra International Tbk | PT Indofood vs. Unilever Indonesia Tbk | PT Indofood vs. Telkom Indonesia Tbk | PT Indofood vs. Bank Mandiri Persero |
Lautan Luas vs. Lotte Chemical Titan | Lautan Luas vs. Inocycle Technology Tbk | Lautan Luas vs. Fast Food Indonesia | Lautan Luas vs. Garudafood Putra Putri |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance |