Correlation Between Indorama Ventures and BTS Group
Can any of the company-specific risk be diversified away by investing in both Indorama Ventures and BTS Group 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 BTS Group 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 BTS Group Holdings, you can compare the effects of market volatilities on Indorama Ventures and BTS Group 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 BTS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Ventures and BTS Group.
Diversification Opportunities for Indorama Ventures and BTS Group
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indorama and BTS is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Ventures PCL and BTS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTS Group Holdings 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 BTS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTS Group Holdings has no effect on the direction of Indorama Ventures i.e., Indorama Ventures and BTS Group go up and down completely randomly.
Pair Corralation between Indorama Ventures and BTS Group
Assuming the 90 days trading horizon Indorama Ventures PCL is expected to under-perform the BTS Group. In addition to that, Indorama Ventures is 1.03 times more volatile than BTS Group Holdings. It trades about -0.05 of its total potential returns per unit of risk. BTS Group Holdings is currently generating about 0.29 per unit of volatility. If you would invest 498.00 in BTS Group Holdings on September 3, 2024 and sell it today you would earn a total of 57.00 from holding BTS Group Holdings or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indorama Ventures PCL vs. BTS Group Holdings
Performance |
| Timeline |
| Indorama Ventures PCL |
| BTS Group Holdings |
Indorama Ventures and BTS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Ventures and BTS Group
The main advantage of trading using opposite Indorama Ventures and BTS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Ventures position performs unexpectedly, BTS Group 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 BTS Group will offset losses from the drop in BTS Group's long position.| Indorama Ventures vs. PTT Public | Indorama Ventures vs. PTT Exploration and | Indorama Ventures vs. The Siam Cement | Indorama Ventures vs. CP ALL Public |
| BTS Group vs. Bangkok Expressway and | BTS Group vs. CP ALL Public | BTS Group vs. Airports of Thailand | BTS Group vs. Bangkok Dusit Medical |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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