Correlation Between Ever Shine and Indorama Synthetics
Can any of the company-specific risk be diversified away by investing in both Ever Shine and Indorama Synthetics 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 Ever Shine and Indorama Synthetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ever Shine Textile and Indorama Synthetics Tbk, you can compare the effects of market volatilities on Ever Shine and Indorama Synthetics 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 Ever Shine with a short position of Indorama Synthetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ever Shine and Indorama Synthetics.
Diversification Opportunities for Ever Shine and Indorama Synthetics
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ever and Indorama is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ever Shine Textile and Indorama Synthetics Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indorama Synthetics Tbk and Ever Shine 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 Ever Shine Textile are associated (or correlated) with Indorama Synthetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indorama Synthetics Tbk has no effect on the direction of Ever Shine i.e., Ever Shine and Indorama Synthetics go up and down completely randomly.
Pair Corralation between Ever Shine and Indorama Synthetics
Assuming the 90 days trading horizon Ever Shine Textile is expected to generate 1.7 times more return on investment than Indorama Synthetics. However, Ever Shine is 1.7 times more volatile than Indorama Synthetics Tbk. It trades about 0.13 of its potential returns per unit of risk. Indorama Synthetics Tbk is currently generating about -0.16 per unit of risk. If you would invest 3,300 in Ever Shine Textile on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Ever Shine Textile or generate 30.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ever Shine Textile vs. Indorama Synthetics Tbk
Performance |
| Timeline |
| Ever Shine Textile |
| Indorama Synthetics Tbk |
Ever Shine and Indorama Synthetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ever Shine and Indorama Synthetics
The main advantage of trading using opposite Ever Shine and Indorama Synthetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ever Shine position performs unexpectedly, Indorama Synthetics 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 Synthetics will offset losses from the drop in Indorama Synthetics' long position.| Ever Shine vs. Eratex Djaja Tbk | Ever Shine vs. Goodyear Indonesia Tbk | Ever Shine vs. PT Century Textile | Ever Shine vs. Sepatu Bata Tbk |
| Indorama Synthetics vs. Pembangunan Jaya Ancol | Indorama Synthetics vs. Panorama Sentrawisata Tbk | Indorama Synthetics vs. Millennium Pharmacon International | Indorama Synthetics vs. Tempo Inti Media |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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