Correlation Between Indorama Ventures and Aikchol Hospital

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

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

Diversification Opportunities for Indorama Ventures and Aikchol Hospital

0.68

Correlation Coefficient

Indorama Ventures  Aikchol Hospital

Poor diversification

The 3 months correlation between Indorama and Aikchol is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Ventures PCL and Aikchol Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aikchol Hospital Public and Indorama Ventures 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 Indorama Ventures PCL are associated (or correlated) with Aikchol Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aikchol Hospital Public has no effect on the direction of Indorama Ventures i.e., Indorama Ventures and Aikchol Hospital go up and down completely randomly.

Pair Corralation between Indorama Ventures and Aikchol Hospital

Assuming the 90 days trading horizon Indorama Ventures PCL is expected to under-perform the Aikchol Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Indorama Ventures PCL is 1.43 times less risky than Aikchol Hospital. The stock trades about -0.18 of its potential returns per unit of risk. The Aikchol Hospital Public is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,550  in Aikchol Hospital Public on December 1, 2024 and sell it today you would lose (150.00) from holding Aikchol Hospital Public or give up 9.68% of portfolio value over 90 days.

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

Indorama Ventures PCL  vs.  Aikchol Hospital Public

Indorama Ventures PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indorama Ventures PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Aikchol Hospital Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aikchol Hospital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators 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 Indorama Ventures and Aikchol Hospital

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

The idea behind Indorama Ventures PCL and Aikchol Hospital Public 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.