Correlation Between INDOFOOD AGRI and Boeing

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

By analyzing existing cross correlation between INDOFOOD AGRI RES and The Boeing, you can compare the effects of market volatilities on INDOFOOD AGRI and Boeing 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 INDOFOOD AGRI with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and Boeing.

Diversification Opportunities for INDOFOOD AGRI and Boeing

0.0

Correlation Coefficient

INDOFOOD AGRI  Boeing

Pay attention - limited upside

The 3 months correlation between INDOFOOD and Boeing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and INDOFOOD AGRI 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 INDOFOOD AGRI RES are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and Boeing go up and down completely randomly.

Pair Corralation between INDOFOOD AGRI and Boeing

If you would invest  0.00  in The Boeing on December 22, 2024 and sell it today you would earn a total of  0.00  from holding The Boeing or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

INDOFOOD AGRI RES  vs.  The Boeing

INDOFOOD AGRI RES

Risk-Adjusted Performance

Very Weak

Over the last 90 days INDOFOOD AGRI RES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, INDOFOOD AGRI is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Boeing

Risk-Adjusted Performance

Weak

Over the last 90 days The Boeing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Boeing is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with INDOFOOD AGRI and Boeing

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

The idea behind INDOFOOD AGRI RES and The Boeing 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.