Correlation Between Indara Insurance and I2 Enterprise
Can any of the company-specific risk be diversified away by investing in both Indara Insurance and I2 Enterprise 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 I2 Enterprise 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 I2 Enterprise Public, you can compare the effects of market volatilities on Indara Insurance and I2 Enterprise 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 I2 Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indara Insurance and I2 Enterprise.
Diversification Opportunities for Indara Insurance and I2 Enterprise
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Indara and I2 Enterprise is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Indara Insurance Public and I2 Enterprise Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I2 Enterprise 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 I2 Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I2 Enterprise Public has no effect on the direction of Indara Insurance i.e., Indara Insurance and I2 Enterprise go up and down completely randomly.
Pair Corralation between Indara Insurance and I2 Enterprise
Assuming the 90 days trading horizon Indara Insurance Public is expected to generate 16.15 times more return on investment than I2 Enterprise. However, Indara Insurance is 16.15 times more volatile than I2 Enterprise Public. It trades about 0.04 of its potential returns per unit of risk. I2 Enterprise Public is currently generating about -0.04 per unit of risk. If you would invest 22,000 in Indara Insurance Public on October 13, 2024 and sell it today you would lose (14,300) from holding Indara Insurance Public or give up 65.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 72.92% |
| Values | Daily Returns |
Indara Insurance Public vs. I2 Enterprise Public
Performance |
| Timeline |
| Indara Insurance Public |
| I2 Enterprise Public |
Indara Insurance and I2 Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indara Insurance and I2 Enterprise
The main advantage of trading using opposite Indara Insurance and I2 Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indara Insurance position performs unexpectedly, I2 Enterprise 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 I2 Enterprise will offset losses from the drop in I2 Enterprise'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 |
| I2 Enterprise vs. Bangkok Union Insurance | I2 Enterprise vs. Indara Insurance Public | I2 Enterprise vs. Nonthavej Hospital Public | I2 Enterprise vs. City Sports and |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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