Correlation Between INDOFOOD AGRI and DAX Index
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By analyzing existing cross correlation between INDOFOOD AGRI RES and DAX Index, you can compare the effects of market volatilities on INDOFOOD AGRI and DAX Index 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 DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOFOOD AGRI and DAX Index.
Diversification Opportunities for INDOFOOD AGRI and DAX Index
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INDOFOOD and DAX is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding INDOFOOD AGRI RES and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index 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 DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of INDOFOOD AGRI i.e., INDOFOOD AGRI and DAX Index go up and down completely randomly.
Pair Corralation between INDOFOOD AGRI and DAX Index
Assuming the 90 days trading horizon INDOFOOD AGRI RES is expected to generate 4.64 times more return on investment than DAX Index. However, INDOFOOD AGRI is 4.64 times more volatile than DAX Index. It trades about 0.04 of its potential returns per unit of risk. DAX Index is currently generating about 0.08 per unit of risk. If you would invest 18.00 in INDOFOOD AGRI RES on March 7, 2024 and sell it today you would earn a total of 1.00 from holding INDOFOOD AGRI RES or generate 5.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
INDOFOOD AGRI RES vs. DAX Index
Performance |
Timeline |
INDOFOOD AGRI and DAX Index Volatility Contrast
Predicted Return Density |
Returns |
INDOFOOD AGRI RES
Pair trading matchups for INDOFOOD AGRI
DAX Index
Pair trading matchups for DAX Index
Pair Trading with INDOFOOD AGRI and DAX Index
The main advantage of trading using opposite INDOFOOD AGRI and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOFOOD AGRI position performs unexpectedly, DAX Index 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 DAX Index will offset losses from the drop in DAX Index's long position.INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Apple Inc | INDOFOOD AGRI vs. Microsoft | INDOFOOD AGRI vs. Amazon Inc |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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