Correlation Between INDO-RAMA SYNTHETIC and First Quantum

Can any of the company-specific risk be diversified away by investing in both INDO-RAMA SYNTHETIC and First Quantum 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 INDO-RAMA SYNTHETIC and First Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INDO RAMA SYNTHETIC and First Quantum Minerals, you can compare the effects of market volatilities on INDO-RAMA SYNTHETIC and First Quantum 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 INDO-RAMA SYNTHETIC with a short position of First Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDO-RAMA SYNTHETIC and First Quantum.

Diversification Opportunities for INDO-RAMA SYNTHETIC and First Quantum

0.0

Correlation Coefficient

INDO-RAMA SYNTHETIC  First Quantum

Pay attention - limited upside

The 3 months correlation between INDO-RAMA and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INDO RAMA SYNTHETIC and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals and INDO-RAMA SYNTHETIC 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 INDO RAMA SYNTHETIC are associated (or correlated) with First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of INDO-RAMA SYNTHETIC i.e., INDO-RAMA SYNTHETIC and First Quantum go up and down completely randomly.

Pair Corralation between INDO-RAMA SYNTHETIC and First Quantum

If you would invest  1,245  in First Quantum Minerals on October 24, 2024 and sell it today you would earn a total of  74.00  from holding First Quantum Minerals or generate 5.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

INDO RAMA SYNTHETIC  vs.  First Quantum Minerals

INDO RAMA SYNTHETIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INDO RAMA SYNTHETIC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, INDO-RAMA SYNTHETIC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

First Quantum Minerals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Quantum Minerals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, First Quantum may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with INDO-RAMA SYNTHETIC and First Quantum

The main advantage of trading using opposite INDO-RAMA SYNTHETIC and First Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDO-RAMA SYNTHETIC position performs unexpectedly, First Quantum 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 First Quantum will offset losses from the drop in First Quantum's long position.

The idea behind INDO RAMA SYNTHETIC and First Quantum Minerals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.