Correlation Between INDO RAMA and CHINA EAST
Can any of the company-specific risk be diversified away by investing in both INDO RAMA and CHINA EAST 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 INDO RAMA and CHINA EAST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDO RAMA SYNTHETIC and CHINA EAST ED, you can compare the effects of market volatilities on INDO RAMA and CHINA EAST 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 INDO RAMA with a short position of CHINA EAST. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDO RAMA and CHINA EAST.
Diversification Opportunities for INDO RAMA and CHINA EAST
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INDO and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INDO RAMA SYNTHETIC and CHINA EAST ED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EAST ED and INDO RAMA 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 INDO RAMA SYNTHETIC are associated (or correlated) with CHINA EAST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EAST ED has no effect on the direction of INDO RAMA i.e., INDO RAMA and CHINA EAST go up and down completely randomly.
Pair Corralation between INDO RAMA and CHINA EAST
If you would invest 21.00 in INDO RAMA SYNTHETIC on October 27, 2024 and sell it today you would earn a total of 0.00 from holding INDO RAMA SYNTHETIC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDO RAMA SYNTHETIC vs. CHINA EAST ED
Performance |
| Timeline |
| INDO RAMA SYNTHETIC |
| CHINA EAST ED |
INDO RAMA and CHINA EAST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDO RAMA and CHINA EAST
The main advantage of trading using opposite INDO RAMA and CHINA EAST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDO RAMA position performs unexpectedly, CHINA EAST 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 CHINA EAST will offset losses from the drop in CHINA EAST's long position.| INDO RAMA vs. Cairo Communication SpA | INDO RAMA vs. GALENA MINING LTD | INDO RAMA vs. Singapore Telecommunications Limited | INDO RAMA vs. Tower One Wireless |
| CHINA EAST vs. Strategic Education | CHINA EAST vs. THAI BEVERAGE | CHINA EAST vs. Perdoceo Education | CHINA EAST vs. United Breweries Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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