Correlation Between Somboon Advance and Indorama Ventures
Can any of the company-specific risk be diversified away by investing in both Somboon Advance 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 Somboon Advance and Indorama Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Somboon Advance Technology and Indorama Ventures PCL, you can compare the effects of market volatilities on Somboon Advance 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 Somboon Advance with a short position of Indorama Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Somboon Advance and Indorama Ventures.
Diversification Opportunities for Somboon Advance and Indorama Ventures
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Somboon and Indorama is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Somboon Advance Technology 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 Somboon Advance 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 Somboon Advance Technology 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 Somboon Advance i.e., Somboon Advance and Indorama Ventures go up and down completely randomly.
Pair Corralation between Somboon Advance and Indorama Ventures
Assuming the 90 days trading horizon Somboon Advance Technology is expected to under-perform the Indorama Ventures. But the stock apears to be less risky and, when comparing its historical volatility, Somboon Advance Technology is 1.0 times less risky than Indorama Ventures. The stock trades about -0.17 of its potential returns per unit of risk. The Indorama Ventures PCL is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 2,550 in Indorama Ventures PCL on October 9, 2024 and sell it today you would lose (110.00) from holding Indorama Ventures PCL or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Somboon Advance Technology vs. Indorama Ventures PCL
Performance |
| Timeline |
| Somboon Advance Tech |
| Indorama Ventures PCL |
Somboon Advance and Indorama Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Somboon Advance and Indorama Ventures
The main advantage of trading using opposite Somboon Advance and Indorama Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Somboon Advance 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.| Somboon Advance vs. AAPICO Hitech Public | Somboon Advance vs. Thai Stanley Electric | Somboon Advance vs. Hana Microelectronics Public | Somboon Advance vs. TISCO Financial Group |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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