Correlation Between Sysco and PT Indofood

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

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

Diversification Opportunities for Sysco and PT Indofood

-0.17

Correlation Coefficient

Sysco  PT Indofood

Good diversification

The 3 months correlation between Sysco and PIFMF is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sysco 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 Sysco 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 Sysco 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 Sysco i.e., Sysco and PT Indofood go up and down completely randomly.

Pair Corralation between Sysco and PT Indofood

Considering the 90-day investment horizon Sysco is expected to generate 0.72 times more return on investment than PT Indofood. However, Sysco is 1.39 times less risky than PT Indofood. It trades about 0.01 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  7,304  in Sysco on October 24, 2024 and sell it today you would earn a total of  43.00  from holding Sysco or generate 0.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	72.67%
Values	Daily Returns

Sysco  vs.  PT Indofood Sukses

Sysco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sysco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sysco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

PT Indofood Sukses

Risk-Adjusted Performance

0 of 100

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 nearly stable primary indicators, PT Indofood is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sysco and PT Indofood

The main advantage of trading using opposite Sysco and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sysco 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 Sysco 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .