Correlation Between Regional Container and Indara Insurance
Can any of the company-specific risk be diversified away by investing in both Regional Container and Indara Insurance 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 Regional Container and Indara Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Container Lines and Indara Insurance Public, you can compare the effects of market volatilities on Regional Container and Indara Insurance 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 Regional Container with a short position of Indara Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Container and Indara Insurance.
Diversification Opportunities for Regional Container and Indara Insurance
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Regional and Indara is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Regional Container Lines and Indara Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indara Insurance Public and Regional Container 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 Regional Container Lines are associated (or correlated) with Indara Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indara Insurance Public has no effect on the direction of Regional Container i.e., Regional Container and Indara Insurance go up and down completely randomly.
Pair Corralation between Regional Container and Indara Insurance
Assuming the 90 days trading horizon Regional Container Lines is expected to generate 1.75 times more return on investment than Indara Insurance. However, Regional Container is 1.75 times more volatile than Indara Insurance Public. It trades about 0.23 of its potential returns per unit of risk. Indara Insurance Public is currently generating about -0.19 per unit of risk. If you would invest 2,408 in Regional Container Lines on August 31, 2024 and sell it today you would earn a total of 417.00 from holding Regional Container Lines or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Regional Container Lines vs. Indara Insurance Public
Performance |
| Timeline |
| Regional Container Lines |
| Indara Insurance Public |
Regional Container and Indara Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Container and Indara Insurance
The main advantage of trading using opposite Regional Container and Indara Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Container position performs unexpectedly, Indara Insurance 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 Indara Insurance will offset losses from the drop in Indara Insurance's long position.| Regional Container vs. Precious Shipping Public | Regional Container vs. Regional Container Lines | Regional Container vs. Begistics Public | Regional Container vs. Raja Ferry Port |
| Indara Insurance vs. IFS Capital Public | Indara Insurance vs. Internet Thailand Public | Indara Insurance vs. Hwa Fong Rubber | Indara Insurance vs. Haad Thip 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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