Correlation Between Indofood Sukses and Check Point

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

Diversification Opportunities for Indofood Sukses and Check Point

0.31

Correlation Coefficient

Indofood Sukses  Check Point

Weak diversification

The 3 months correlation between Indofood and Check is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Indofood Sukses Makmur and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Indofood Sukses i.e., Indofood Sukses and Check Point go up and down completely randomly.

Pair Corralation between Indofood Sukses and Check Point

Assuming the 90 days horizon Indofood Sukses Makmur is not expected to generate positive returns. Moreover, Indofood Sukses is 2.35 times more volatile than Check Point Software. It trades away all of its potential returns to assume current level of volatility. Check Point Software is currently generating about -0.01 per unit of risk. If you would invest  2,265  in Indofood Sukses Makmur on September 9, 2025 and sell it today you would lose (89.00) from holding Indofood Sukses Makmur or give up 3.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Indofood Sukses Makmur  vs.  Check Point Software

Indofood Sukses Makmur

Risk-Adjusted Performance

Weakest

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

Check Point Software

Risk-Adjusted Performance

Weakest

Over the last 90 days Check Point Software has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Check Point is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Indofood Sukses and Check Point

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

The idea behind Indofood Sukses Makmur and Check Point Software 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.