Correlation Between Indofood Sukses and IF Bancorp
Can any of the company-specific risk be diversified away by investing in both Indofood Sukses and IF Bancorp 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 Sukses and IF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indofood Sukses Makmur and IF Bancorp, you can compare the effects of market volatilities on Indofood Sukses and IF Bancorp 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 Sukses with a short position of IF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indofood Sukses and IF Bancorp.
Diversification Opportunities for Indofood Sukses and IF Bancorp
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Indofood and IROQ is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and IF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IF Bancorp and Indofood Sukses 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 Sukses Makmur are associated (or correlated) with IF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IF Bancorp has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and IF Bancorp go up and down completely randomly.
Pair Corralation between Indofood Sukses and IF Bancorp
Assuming the 90 days horizon Indofood Sukses Makmur is expected to under-perform the IF Bancorp. In addition to that, Indofood Sukses is 5.47 times more volatile than IF Bancorp. It trades about -0.05 of its total potential returns per unit of risk. IF Bancorp is currently generating about 0.15 per unit of volatility. If you would invest 2,453 in IF Bancorp on July 20, 2025 and sell it today you would earn a total of 135.00 from holding IF Bancorp or generate 5.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 75.38% |
| Values | Daily Returns |
Indofood Sukses Makmur vs. IF Bancorp
Performance |
| Timeline |
| Indofood Sukses Makmur |
| IF Bancorp |
Indofood Sukses and IF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indofood Sukses and IF Bancorp
The main advantage of trading using opposite Indofood Sukses and IF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indofood Sukses position performs unexpectedly, IF Bancorp 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 IF Bancorp will offset losses from the drop in IF Bancorp's long position.| Indofood Sukses vs. First Pacific | Indofood Sukses vs. First Pacific | Indofood Sukses vs. Yamazaki Baking Co | Indofood Sukses vs. China Feihe Limited |
| IF Bancorp vs. Fifth District Bancorp, | IF Bancorp vs. Bank of the | IF Bancorp vs. First Bancshares | IF Bancorp vs. United Bancorp |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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