Correlation Between Exxaro Tiles and Indo Borax

Can any of the company-specific risk be diversified away by investing in both Exxaro Tiles and Indo Borax 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 Exxaro Tiles and Indo Borax into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exxaro Tiles Limited and Indo Borax Chemicals, you can compare the effects of market volatilities on Exxaro Tiles and Indo Borax 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 Exxaro Tiles with a short position of Indo Borax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxaro Tiles and Indo Borax.

Diversification Opportunities for Exxaro Tiles and Indo Borax

0.0

Correlation Coefficient

Exxaro Tiles  Indo Borax

Pay attention - limited upside

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

Pair Corralation between Exxaro Tiles and Indo Borax

If you would invest (100.00) in Exxaro Tiles Limited on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Exxaro Tiles Limited or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Exxaro Tiles Limited  vs.  Indo Borax Chemicals

Exxaro Tiles Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exxaro Tiles Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Exxaro Tiles is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Indo Borax Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indo Borax Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Indo Borax is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Exxaro Tiles and Indo Borax

The main advantage of trading using opposite Exxaro Tiles and Indo Borax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxaro Tiles position performs unexpectedly, Indo Borax 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 Indo Borax will offset losses from the drop in Indo Borax's long position.

The idea behind Exxaro Tiles Limited and Indo Borax Chemicals 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.