Correlation Between Bangkok Dusit and Indorama Ventures
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit 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 Bangkok Dusit and Indorama Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Dusit Medical and Indorama Ventures PCL, you can compare the effects of market volatilities on Bangkok Dusit 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 Bangkok Dusit with a short position of Indorama Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Indorama Ventures.
Diversification Opportunities for Bangkok Dusit and Indorama Ventures
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bangkok and Indorama is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical 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 Bangkok Dusit 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 Bangkok Dusit Medical 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 Bangkok Dusit i.e., Bangkok Dusit and Indorama Ventures go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Indorama Ventures
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to under-perform the Indorama Ventures. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Dusit Medical is 1.81 times less risky than Indorama Ventures. The stock trades about -0.03 of its potential returns per unit of risk. The Indorama Ventures PCL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,224 in Indorama Ventures PCL on September 1, 2024 and sell it today you would earn a total of 276.00 from holding Indorama Ventures PCL or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. Indorama Ventures PCL
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Indorama Ventures PCL |
Bangkok Dusit and Indorama Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Indorama Ventures
The main advantage of trading using opposite Bangkok Dusit and Indorama Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit 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.| Bangkok Dusit vs. Bumrungrad Hospital Public | Bangkok Dusit vs. Bangkok Chain Hospital | Bangkok Dusit vs. Ramkhamhaeng Hospital Public | Bangkok Dusit vs. Vibhavadi Medical Center |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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