Correlation Between CP ALL and Indorama Ventures
Can any of the company-specific risk be diversified away by investing in both CP ALL 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 CP ALL and Indorama Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CP ALL Public and Indorama Ventures PCL, you can compare the effects of market volatilities on CP ALL 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 CP ALL with a short position of Indorama Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Indorama Ventures.
Diversification Opportunities for CP ALL and Indorama Ventures
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CPALL and Indorama is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public 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 CP ALL 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 CP ALL Public 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 CP ALL i.e., CP ALL and Indorama Ventures go up and down completely randomly.
Pair Corralation between CP ALL and Indorama Ventures
Assuming the 90 days trading horizon CP ALL Public is expected to under-perform the Indorama Ventures. But the stock apears to be less risky and, when comparing its historical volatility, CP ALL Public is 1.55 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 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,742 in Indorama Ventures PCL on November 3, 2024 and sell it today you would earn a total of 558.00 from holding Indorama Ventures PCL or generate 32.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CP ALL Public vs. Indorama Ventures PCL
Performance |
| Timeline |
| CP ALL Public |
| Indorama Ventures PCL |
CP ALL and Indorama Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Indorama Ventures
The main advantage of trading using opposite CP ALL and Indorama Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL 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.| CP ALL vs. Airports of Thailand | CP ALL vs. PTT Public | CP ALL vs. Bangkok Dusit Medical | CP ALL vs. Kasikornbank Public |
| Indorama Ventures vs. PTT Global Chemical | Indorama Ventures vs. PTT Exploration and | Indorama Ventures vs. CP ALL Public | Indorama Ventures vs. The Siam Cement |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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