Correlation Between Indorama Synthetics and Anabatic Technologies
Can any of the company-specific risk be diversified away by investing in both Indorama Synthetics and Anabatic Technologies 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 Synthetics and Anabatic Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indorama Synthetics Tbk and Anabatic Technologies Tbk, you can compare the effects of market volatilities on Indorama Synthetics and Anabatic Technologies 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 Synthetics with a short position of Anabatic Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Synthetics and Anabatic Technologies.
Diversification Opportunities for Indorama Synthetics and Anabatic Technologies
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indorama and Anabatic is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Synthetics Tbk and Anabatic Technologies Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anabatic Technologies Tbk and Indorama Synthetics 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 Synthetics Tbk are associated (or correlated) with Anabatic Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anabatic Technologies Tbk has no effect on the direction of Indorama Synthetics i.e., Indorama Synthetics and Anabatic Technologies go up and down completely randomly.
Pair Corralation between Indorama Synthetics and Anabatic Technologies
Assuming the 90 days trading horizon Indorama Synthetics Tbk is expected to under-perform the Anabatic Technologies. In addition to that, Indorama Synthetics is 1.25 times more volatile than Anabatic Technologies Tbk. It trades about -0.39 of its total potential returns per unit of risk. Anabatic Technologies Tbk is currently generating about -0.11 per unit of volatility. If you would invest 39,400 in Anabatic Technologies Tbk on August 28, 2024 and sell it today you would lose (1,400) from holding Anabatic Technologies Tbk or give up 3.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indorama Synthetics Tbk vs. Anabatic Technologies Tbk
Performance |
| Timeline |
| Indorama Synthetics Tbk |
| Anabatic Technologies Tbk |
Indorama Synthetics and Anabatic Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Synthetics and Anabatic Technologies
The main advantage of trading using opposite Indorama Synthetics and Anabatic Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Synthetics position performs unexpectedly, Anabatic Technologies 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 Anabatic Technologies will offset losses from the drop in Anabatic Technologies' long position.| Indorama Synthetics vs. Indospring Tbk | Indorama Synthetics vs. Indomobil Sukses Internasional | Indorama Synthetics vs. Sumi Indo Kabel | Indorama Synthetics vs. Goodyear Indonesia Tbk |
| Anabatic Technologies vs. Multipolar Tbk | Anabatic Technologies vs. Astra Graphia Tbk | Anabatic Technologies vs. Matahari Putra Prima | Anabatic Technologies vs. Ramayana Lestari Sentosa |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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