Correlation Between Indara Insurance and Asia Metal
Can any of the company-specific risk be diversified away by investing in both Indara Insurance and Asia Metal 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 Asia Metal 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 Asia Metal Public, you can compare the effects of market volatilities on Indara Insurance and Asia Metal 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 Asia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indara Insurance and Asia Metal.
Diversification Opportunities for Indara Insurance and Asia Metal
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indara and Asia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Indara Insurance Public and Asia Metal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Metal Public 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 Asia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Metal Public has no effect on the direction of Indara Insurance i.e., Indara Insurance and Asia Metal go up and down completely randomly.
Pair Corralation between Indara Insurance and Asia Metal
Assuming the 90 days trading horizon Indara Insurance Public is expected to generate 36.87 times more return on investment than Asia Metal. However, Indara Insurance is 36.87 times more volatile than Asia Metal Public. It trades about 0.1 of its potential returns per unit of risk. Asia Metal Public is currently generating about -0.17 per unit of risk. If you would invest 0.00 in Indara Insurance Public on November 2, 2024 and sell it today you would earn a total of 8,100 from holding Indara Insurance Public or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indara Insurance Public vs. Asia Metal Public
Performance |
| Timeline |
| Indara Insurance Public |
| Asia Metal Public |
Indara Insurance and Asia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indara Insurance and Asia Metal
The main advantage of trading using opposite Indara Insurance and Asia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indara Insurance position performs unexpectedly, Asia Metal 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 Asia Metal will offset losses from the drop in Asia Metal's long position.| Indara Insurance vs. IFS Capital Public | Indara Insurance vs. Internet Thailand Public | Indara Insurance vs. Hwa Fong Rubber | Indara Insurance vs. Haad Thip Public |
| Asia Metal vs. 2S Metal Public | Asia Metal vs. AAPICO Hitech Public | Asia Metal vs. CSP Steel Center | Asia Metal vs. Bangsaphan Barmill Public |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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