Correlation Between Indorama Ventures and Agripure Holdings

Can any of the company-specific risk be diversified away by investing in both Indorama Ventures and Agripure Holdings 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 Agripure Holdings 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 Agripure Holdings Public, you can compare the effects of market volatilities on Indorama Ventures and Agripure Holdings 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 Agripure Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Ventures and Agripure Holdings.

Diversification Opportunities for Indorama Ventures and Agripure Holdings

-0.54

Correlation Coefficient

Indorama Ventures  Agripure Holdings

Excellent diversification

The 3 months correlation between Indorama and Agripure is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Ventures PCL and Agripure Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agripure Holdings 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 Agripure Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agripure Holdings Public has no effect on the direction of Indorama Ventures i.e., Indorama Ventures and Agripure Holdings go up and down completely randomly.

Pair Corralation between Indorama Ventures and Agripure Holdings

Assuming the 90 days trading horizon Indorama Ventures PCL is expected to under-perform the Agripure Holdings. In addition to that, Indorama Ventures is 1.34 times more volatile than Agripure Holdings Public. It trades about -0.04 of its total potential returns per unit of risk. Agripure Holdings Public is currently generating about -0.01 per unit of volatility. If you would invest  477.00  in Agripure Holdings Public on October 11, 2024 and sell it today you would lose (71.00) from holding Agripure Holdings Public or give up 14.88% of portfolio value over 90 days.

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

Indorama Ventures PCL  vs.  Agripure Holdings Public

Indorama Ventures PCL

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Indorama Ventures PCL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Indorama Ventures is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Agripure Holdings Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agripure Holdings Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Indorama Ventures and Agripure Holdings

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

The idea behind Indorama Ventures PCL and Agripure Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.