Correlation Between Regional Container and Indorama Ventures
Can any of the company-specific risk be diversified away by investing in both Regional Container and Indorama Ventures 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 Indorama Ventures 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 Indorama Ventures PCL, you can compare the effects of market volatilities on Regional Container and Indorama Ventures 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 Indorama Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Container and Indorama Ventures.
Diversification Opportunities for Regional Container and Indorama Ventures
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Regional and Indorama is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Regional Container Lines and Indorama Ventures PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indorama Ventures PCL 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 Indorama Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indorama Ventures PCL has no effect on the direction of Regional Container i.e., Regional Container and Indorama Ventures go up and down completely randomly.
Pair Corralation between Regional Container and Indorama Ventures
Assuming the 90 days trading horizon Regional Container Lines is expected to generate 0.63 times more return on investment than Indorama Ventures. However, Regional Container Lines is 1.58 times less risky than Indorama Ventures. It trades about -0.26 of its potential returns per unit of risk. Indorama Ventures PCL is currently generating about -0.23 per unit of risk. If you would invest 2,775 in Regional Container Lines on October 24, 2024 and sell it today you would lose (250.00) from holding Regional Container Lines or give up 9.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Container Lines vs. Indorama Ventures PCL
Performance |
| Timeline |
| Regional Container Lines |
| Indorama Ventures PCL |
Regional Container and Indorama Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Container and Indorama Ventures
The main advantage of trading using opposite Regional Container and Indorama Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Container position performs unexpectedly, Indorama Ventures 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 Indorama Ventures will offset losses from the drop in Indorama Ventures' long position.| Regional Container vs. Precious Shipping Public | Regional Container vs. Thoresen Thai Agencies | Regional Container vs. The Siam Cement | Regional Container vs. PTT Public |
| Indorama Ventures vs. PTT Global Chemical | Indorama Ventures vs. PTT Exploration and | Indorama Ventures vs. CP ALL Public | Indorama Ventures 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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