Correlation Between Indorama Ventures and AIR LIQUIDE
Can any of the company-specific risk be diversified away by investing in both Indorama Ventures and AIR LIQUIDE 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 Indorama Ventures and AIR LIQUIDE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indorama Ventures PCL and AIR LIQUIDE ADR, you can compare the effects of market volatilities on Indorama Ventures and AIR LIQUIDE 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 Indorama Ventures with a short position of AIR LIQUIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Ventures and AIR LIQUIDE.
Diversification Opportunities for Indorama Ventures and AIR LIQUIDE
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indorama and AIR is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Ventures PCL and AIR LIQUIDE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR LIQUIDE ADR and Indorama Ventures 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 Indorama Ventures PCL are associated (or correlated) with AIR LIQUIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR LIQUIDE ADR has no effect on the direction of Indorama Ventures i.e., Indorama Ventures and AIR LIQUIDE go up and down completely randomly.
Pair Corralation between Indorama Ventures and AIR LIQUIDE
Assuming the 90 days trading horizon Indorama Ventures PCL is expected to under-perform the AIR LIQUIDE. In addition to that, Indorama Ventures is 2.31 times more volatile than AIR LIQUIDE ADR. It trades about -0.11 of its total potential returns per unit of risk. AIR LIQUIDE ADR is currently generating about 0.2 per unit of volatility. If you would invest 3,060 in AIR LIQUIDE ADR on November 4, 2024 and sell it today you would earn a total of 240.00 from holding AIR LIQUIDE ADR or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indorama Ventures PCL vs. AIR LIQUIDE ADR
Performance |
| Timeline |
| Indorama Ventures PCL |
| AIR LIQUIDE ADR |
Indorama Ventures and AIR LIQUIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Ventures and AIR LIQUIDE
The main advantage of trading using opposite Indorama Ventures and AIR LIQUIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Ventures position performs unexpectedly, AIR LIQUIDE 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 AIR LIQUIDE will offset losses from the drop in AIR LIQUIDE's long position.| Indorama Ventures vs. SLR Investment Corp | Indorama Ventures vs. HK Electric Investments | Indorama Ventures vs. China Eastern Airlines | Indorama Ventures vs. Gol Intelligent Airlines |
| AIR LIQUIDE vs. Air Liquide SA | AIR LIQUIDE vs. Air Products and | AIR LIQUIDE vs. Shin Etsu Chemical Co | AIR LIQUIDE vs. BASF SE |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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