Correlation Between Indorama Ventures and Asian Sea
Can any of the company-specific risk be diversified away by investing in both Indorama Ventures and Asian Sea 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 Ventures and Asian Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indorama Ventures PCL and Asian Sea, you can compare the effects of market volatilities on Indorama Ventures and Asian Sea 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 Ventures with a short position of Asian Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Ventures and Asian Sea.
Diversification Opportunities for Indorama Ventures and Asian Sea
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indorama and Asian is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Ventures PCL and Asian Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Sea and Indorama Ventures 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 Ventures PCL are associated (or correlated) with Asian Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Sea has no effect on the direction of Indorama Ventures i.e., Indorama Ventures and Asian Sea go up and down completely randomly.
Pair Corralation between Indorama Ventures and Asian Sea
Assuming the 90 days trading horizon Indorama Ventures PCL is expected to generate 1.77 times more return on investment than Asian Sea. However, Indorama Ventures is 1.77 times more volatile than Asian Sea. It trades about -0.06 of its potential returns per unit of risk. Asian Sea is currently generating about -0.22 per unit of risk. If you would invest 2,582 in Indorama Ventures PCL on August 29, 2024 and sell it today you would lose (82.00) from holding Indorama Ventures PCL or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indorama Ventures PCL vs. Asian Sea
Performance |
| Timeline |
| Indorama Ventures PCL |
| Asian Sea |
Indorama Ventures and Asian Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Ventures and Asian Sea
The main advantage of trading using opposite Indorama Ventures and Asian Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Ventures position performs unexpectedly, Asian Sea 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 Asian Sea will offset losses from the drop in Asian Sea's long position.| Indorama Ventures vs. 2S Metal Public | Indorama Ventures vs. AAPICO Hitech Public | Indorama Ventures vs. Bangsaphan Barmill Public | Indorama Ventures vs. AJ Plast Public |
| Asian Sea vs. GFPT Public | Asian Sea vs. Carabao Group Public | Asian Sea vs. Thai Union Group | Asian Sea vs. Agripure Holdings 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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