Correlation Between Indara Insurance and Bangkok Sheet

Can any of the company-specific risk be diversified away by investing in both Indara Insurance and Bangkok Sheet 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 Indara Insurance and Bangkok Sheet into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indara Insurance Public and Bangkok Sheet Metal, you can compare the effects of market volatilities on Indara Insurance and Bangkok Sheet 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 Indara Insurance with a short position of Bangkok Sheet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indara Insurance and Bangkok Sheet.

Diversification Opportunities for Indara Insurance and Bangkok Sheet

-0.13

Correlation Coefficient

Indara Insurance  Bangkok Sheet

Good diversification

The 3 months correlation between Indara and Bangkok is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Indara Insurance Public and Bangkok Sheet Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Sheet Metal and Indara Insurance 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 Indara Insurance Public are associated (or correlated) with Bangkok Sheet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Sheet Metal has no effect on the direction of Indara Insurance i.e., Indara Insurance and Bangkok Sheet go up and down completely randomly.

Pair Corralation between Indara Insurance and Bangkok Sheet

Assuming the 90 days trading horizon Indara Insurance Public is expected to generate 1.55 times more return on investment than Bangkok Sheet. However, Indara Insurance is 1.55 times more volatile than Bangkok Sheet Metal. It trades about 0.13 of its potential returns per unit of risk. Bangkok Sheet Metal is currently generating about -0.07 per unit of risk. If you would invest  7,575  in Indara Insurance Public on December 22, 2024 and sell it today you would earn a total of  1,825  from holding Indara Insurance Public or generate 24.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Indara Insurance Public  vs.  Bangkok Sheet Metal

Indara Insurance Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Indara Insurance Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Indara Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Bangkok Sheet Metal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bangkok Sheet Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Indara Insurance and Bangkok Sheet

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

The idea behind Indara Insurance Public and Bangkok Sheet Metal 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.