Correlation Between Indorama Ventures and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both Indorama Ventures and Bangkok Bank 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 Bangkok Bank 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 Bangkok Bank Public, you can compare the effects of market volatilities on Indorama Ventures and Bangkok Bank 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 Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Ventures and Bangkok Bank.
Diversification Opportunities for Indorama Ventures and Bangkok Bank
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Indorama and Bangkok is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Ventures PCL and Bangkok Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Bank Public 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 Bangkok Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Bank Public has no effect on the direction of Indorama Ventures i.e., Indorama Ventures and Bangkok Bank go up and down completely randomly.
Pair Corralation between Indorama Ventures and Bangkok Bank
Assuming the 90 days trading horizon Indorama Ventures PCL is expected to generate 1.98 times more return on investment than Bangkok Bank. However, Indorama Ventures is 1.98 times more volatile than Bangkok Bank Public. It trades about 0.05 of its potential returns per unit of risk. Bangkok Bank Public is currently generating about 0.07 per unit of risk. If you would invest 2,224 in Indorama Ventures PCL on September 1, 2024 and sell it today you would earn a total of 276.00 from holding Indorama Ventures PCL or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indorama Ventures PCL vs. Bangkok Bank Public
Performance |
| Timeline |
| Indorama Ventures PCL |
| Bangkok Bank Public |
Indorama Ventures and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Ventures and Bangkok Bank
The main advantage of trading using opposite Indorama Ventures and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Ventures position performs unexpectedly, Bangkok Bank 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 Bangkok Bank will offset losses from the drop in Bangkok Bank's long position.| Indorama Ventures vs. AAPICO Hitech Public | Indorama Ventures vs. AP Public | Indorama Ventures vs. Aikchol Hospital Public | Indorama Ventures vs. Bank of Ayudhya |
| Bangkok Bank vs. SCB X Public | Bangkok Bank vs. Kasikornbank Public | Bangkok Bank vs. PTT Public | Bangkok Bank vs. The Siam Cement |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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