Correlation Between Advanced Info and Indorama Ventures
Can any of the company-specific risk be diversified away by investing in both Advanced Info and Indorama Ventures 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 Advanced Info and Indorama Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Info Service and Indorama Ventures PCL, you can compare the effects of market volatilities on Advanced Info and Indorama Ventures 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 Advanced Info with a short position of Indorama Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Info and Indorama Ventures.
Diversification Opportunities for Advanced Info and Indorama Ventures
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advanced and Indorama is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service and Indorama Ventures PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indorama Ventures PCL and Advanced Info 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 Advanced Info Service are associated (or correlated) with Indorama Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indorama Ventures PCL has no effect on the direction of Advanced Info i.e., Advanced Info and Indorama Ventures go up and down completely randomly.
Pair Corralation between Advanced Info and Indorama Ventures
Assuming the 90 days trading horizon Advanced Info Service is expected to generate 0.7 times more return on investment than Indorama Ventures. However, Advanced Info Service is 1.43 times less risky than Indorama Ventures. It trades about 0.13 of its potential returns per unit of risk. Indorama Ventures PCL is currently generating about -0.07 per unit of risk. If you would invest 27,500 in Advanced Info Service on September 1, 2024 and sell it today you would earn a total of 1,000.00 from holding Advanced Info Service or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Info Service vs. Indorama Ventures PCL
Performance |
| Timeline |
| Advanced Info Service |
| Indorama Ventures PCL |
Advanced Info and Indorama Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Info and Indorama Ventures
The main advantage of trading using opposite Advanced Info and Indorama Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Info position performs unexpectedly, Indorama Ventures 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 Indorama Ventures will offset losses from the drop in Indorama Ventures' long position.| Advanced Info vs. PTT Public | Advanced Info vs. CP ALL Public | Advanced Info vs. Kasikornbank Public | Advanced Info vs. Bangkok Bank Public |
| Indorama Ventures vs. AAPICO Hitech Public | Indorama Ventures vs. AP Public | Indorama Ventures vs. Aikchol Hospital Public | Indorama Ventures vs. Bank of Ayudhya |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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