Correlation Between Indara Insurance and AIM Industrial
Can any of the company-specific risk be diversified away by investing in both Indara Insurance and AIM Industrial 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 Indara Insurance and AIM Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indara Insurance Public and AIM Industrial Growth, you can compare the effects of market volatilities on Indara Insurance and AIM Industrial 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 Indara Insurance with a short position of AIM Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indara Insurance and AIM Industrial.
Diversification Opportunities for Indara Insurance and AIM Industrial
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Indara and AIM is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Indara Insurance Public and AIM Industrial Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM Industrial Growth and Indara Insurance 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 Indara Insurance Public are associated (or correlated) with AIM Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM Industrial Growth has no effect on the direction of Indara Insurance i.e., Indara Insurance and AIM Industrial go up and down completely randomly.
Pair Corralation between Indara Insurance and AIM Industrial
Assuming the 90 days trading horizon Indara Insurance Public is expected to generate 65.47 times more return on investment than AIM Industrial. However, Indara Insurance is 65.47 times more volatile than AIM Industrial Growth. It trades about 0.05 of its potential returns per unit of risk. AIM Industrial Growth is currently generating about 0.02 per unit of risk. If you would invest 11,500 in Indara Insurance Public on September 14, 2024 and sell it today you would lose (3,600) from holding Indara Insurance Public or give up 31.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indara Insurance Public vs. AIM Industrial Growth
Performance |
| Timeline |
| Indara Insurance Public |
| AIM Industrial Growth |
Indara Insurance and AIM Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indara Insurance and AIM Industrial
The main advantage of trading using opposite Indara Insurance and AIM Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indara Insurance position performs unexpectedly, AIM Industrial 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 AIM Industrial will offset losses from the drop in AIM Industrial's long position.| Indara Insurance vs. KGI Securities Public | Indara Insurance vs. Lalin Property Public | Indara Insurance vs. Hwa Fong Rubber | Indara Insurance vs. MCS Steel Public |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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