Correlation Between Aikchol Hospital and Indorama Ventures

Can any of the company-specific risk be diversified away by investing in both Aikchol Hospital 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 Aikchol Hospital and Indorama Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aikchol Hospital Public and Indorama Ventures PCL, you can compare the effects of market volatilities on Aikchol Hospital 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 Aikchol Hospital with a short position of Indorama Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aikchol Hospital and Indorama Ventures.

Diversification Opportunities for Aikchol Hospital and Indorama Ventures

0.34

Correlation Coefficient

Aikchol Hospital  Indorama Ventures

Weak diversification

The 3 months correlation between Aikchol and Indorama is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aikchol Hospital Public 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 Aikchol Hospital 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 Aikchol Hospital Public 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 Aikchol Hospital i.e., Aikchol Hospital and Indorama Ventures go up and down completely randomly.

Pair Corralation between Aikchol Hospital and Indorama Ventures

Assuming the 90 days trading horizon Aikchol Hospital Public is expected to generate 23.24 times more return on investment than Indorama Ventures. However, Aikchol Hospital is 23.24 times more volatile than Indorama Ventures PCL. It trades about 0.05 of its potential returns per unit of risk. Indorama Ventures PCL is currently generating about -0.02 per unit of risk. If you would invest  1,639  in Aikchol Hospital Public on September 1, 2024 and sell it today you would lose (89.00) from holding Aikchol Hospital Public or give up 5.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aikchol Hospital Public  vs.  Indorama Ventures PCL

Aikchol Hospital Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aikchol Hospital Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Aikchol Hospital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Indorama Ventures PCL

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Indorama Ventures PCL are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Indorama Ventures disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aikchol Hospital and Indorama Ventures

The main advantage of trading using opposite Aikchol Hospital and Indorama Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aikchol Hospital 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.

The idea behind Aikchol Hospital Public and Indorama Ventures PCL 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.