Correlation Between PT Indofood and ADRIATIC METALS

Can any of the company-specific risk be diversified away by investing in both PT Indofood and ADRIATIC METALS 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 ADRIATIC METALS 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 ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on PT Indofood and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indofood and ADRIATIC METALS.

Diversification Opportunities for PT Indofood and ADRIATIC METALS

-0.03

Correlation Coefficient

PT Indofood  ADRIATIC METALS

Good diversification

The 3 months correlation between ISM and ADRIATIC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PT Indofood Sukses and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of PT Indofood i.e., PT Indofood and ADRIATIC METALS go up and down completely randomly.

Pair Corralation between PT Indofood and ADRIATIC METALS

Assuming the 90 days horizon PT Indofood Sukses is expected to under-perform the ADRIATIC METALS. But the stock apears to be less risky and, when comparing its historical volatility, PT Indofood Sukses is 1.22 times less risky than ADRIATIC METALS. The stock trades about -0.08 of its potential returns per unit of risk. The ADRIATIC METALS LS 013355 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  244.00  in ADRIATIC METALS LS 013355 on December 7, 2024 and sell it today you would lose (2.00) from holding ADRIATIC METALS LS 013355 or give up 0.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PT Indofood Sukses  vs.  ADRIATIC METALS LS 013355

PT Indofood Sukses

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Indofood Sukses has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ADRIATIC METALS LS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ADRIATIC METALS LS 013355 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ADRIATIC METALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Indofood and ADRIATIC METALS

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

The idea behind PT Indofood Sukses and ADRIATIC METALS LS 013355 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.