Correlation Between DAX Index and Indorama Ventures
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By analyzing existing cross correlation between DAX Index and Indorama Ventures PCL, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Indorama Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Indorama Ventures.
Diversification Opportunities for DAX Index and Indorama Ventures
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Indorama is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index 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 DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Indorama Ventures go up and down completely randomly.
Pair Corralation between DAX Index and Indorama Ventures
Assuming the 90 days trading horizon DAX Index is expected to generate 12.4 times less return on investment than Indorama Ventures. But when comparing it to its historical volatility, DAX Index is 9.27 times less risky than Indorama Ventures. It trades about 0.08 of its potential returns per unit of risk. Indorama Ventures PCL is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8.61 in Indorama Ventures PCL on September 4, 2024 and sell it today you would earn a total of 58.39 from holding Indorama Ventures PCL or generate 678.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Indorama Ventures PCL
Performance |
| Timeline |
DAX Index and Indorama Ventures Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Indorama Ventures PCL
Pair trading matchups for Indorama Ventures
Pair Trading with DAX Index and Indorama Ventures
The main advantage of trading using opposite DAX Index and Indorama Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. LION ONE METALS | DAX Index vs. KENNAMETAL INC | DAX Index vs. HYATT HOTELS A | DAX Index vs. Zijin Mining Group |
| Indorama Ventures vs. COLUMBIA SPORTSWEAR | Indorama Ventures vs. Scandinavian Tobacco Group | Indorama Ventures vs. VIRGIN WINES UK | Indorama Ventures vs. JD SPORTS FASH |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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