Correlation Between Com7 PCL and Indorama Ventures
Can any of the company-specific risk be diversified away by investing in both Com7 PCL 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 Com7 PCL and Indorama Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and Indorama Ventures PCL, you can compare the effects of market volatilities on Com7 PCL 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 Com7 PCL with a short position of Indorama Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and Indorama Ventures.
Diversification Opportunities for Com7 PCL and Indorama Ventures
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Com7 and Indorama is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL 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 Com7 PCL 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 Com7 PCL 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 Com7 PCL i.e., Com7 PCL and Indorama Ventures go up and down completely randomly.
Pair Corralation between Com7 PCL and Indorama Ventures
Assuming the 90 days trading horizon Com7 PCL is expected to under-perform the Indorama Ventures. In addition to that, Com7 PCL is 1.39 times more volatile than Indorama Ventures PCL. It trades about -0.05 of its total potential returns per unit of risk. Indorama Ventures PCL is currently generating about -0.05 per unit of volatility. If you would invest 2,558 in Indorama Ventures PCL on September 3, 2024 and sell it today you would lose (58.00) from holding Indorama Ventures PCL or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Com7 PCL vs. Indorama Ventures PCL
Performance |
| Timeline |
| Com7 PCL |
| Indorama Ventures PCL |
Com7 PCL and Indorama Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and Indorama Ventures
The main advantage of trading using opposite Com7 PCL and Indorama Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL 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.| Com7 PCL vs. Central Pattana Public | Com7 PCL vs. CP ALL Public | Com7 PCL vs. Bangkok Dusit Medical | Com7 PCL vs. Airports of Thailand |
| Indorama Ventures vs. PTT Public | Indorama Ventures vs. PTT Exploration and | Indorama Ventures vs. The Siam Cement | Indorama Ventures vs. CP ALL Public |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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