Correlation Between Inocycle Technology and Indorama Synthetics
Can any of the company-specific risk be diversified away by investing in both Inocycle Technology 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 Inocycle Technology and Indorama Synthetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inocycle Technology Tbk and Indorama Synthetics Tbk, you can compare the effects of market volatilities on Inocycle Technology 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 Inocycle Technology with a short position of Indorama Synthetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inocycle Technology and Indorama Synthetics.
Diversification Opportunities for Inocycle Technology and Indorama Synthetics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inocycle and Indorama is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Inocycle Technology Tbk 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 Inocycle Technology 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 Inocycle Technology Tbk 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 Inocycle Technology i.e., Inocycle Technology and Indorama Synthetics go up and down completely randomly.
Pair Corralation between Inocycle Technology and Indorama Synthetics
Assuming the 90 days trading horizon Inocycle Technology Tbk is expected to generate 2.19 times more return on investment than Indorama Synthetics. However, Inocycle Technology is 2.19 times more volatile than Indorama Synthetics Tbk. It trades about 0.02 of its potential returns per unit of risk. Indorama Synthetics Tbk is currently generating about -0.05 per unit of risk. If you would invest 8,900 in Inocycle Technology Tbk on November 28, 2024 and sell it today you would lose (300.00) from holding Inocycle Technology Tbk or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inocycle Technology Tbk vs. Indorama Synthetics Tbk
Performance |
| Timeline |
| Inocycle Technology Tbk |
| Indorama Synthetics Tbk |
Inocycle Technology and Indorama Synthetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inocycle Technology and Indorama Synthetics
The main advantage of trading using opposite Inocycle Technology and Indorama Synthetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inocycle Technology 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.| Inocycle Technology vs. MNC Vision Networks | Inocycle Technology vs. Hartadinata Abadi Tbk | Inocycle Technology vs. Kencana Energi Lestari | Inocycle Technology vs. Bali Bintang Sejahtera |
| Indorama Synthetics vs. Indospring Tbk | Indorama Synthetics vs. Indomobil Sukses Internasional | Indorama Synthetics vs. Sumi Indo Kabel | Indorama Synthetics vs. Goodyear Indonesia Tbk |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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