Correlation Between INDO-RAMA SYNTHETIC and AIR PRODCHEMICALS

Can any of the company-specific risk be diversified away by investing in both INDO-RAMA SYNTHETIC and AIR PRODCHEMICALS 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 INDO-RAMA SYNTHETIC and AIR PRODCHEMICALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INDO RAMA SYNTHETIC and AIR PRODCHEMICALS, you can compare the effects of market volatilities on INDO-RAMA SYNTHETIC and AIR PRODCHEMICALS 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 INDO-RAMA SYNTHETIC with a short position of AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDO-RAMA SYNTHETIC and AIR PRODCHEMICALS.

Diversification Opportunities for INDO-RAMA SYNTHETIC and AIR PRODCHEMICALS

0.0

Correlation Coefficient

INDO-RAMA SYNTHETIC  AIR PRODCHEMICALS

Pay attention - limited upside

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

Pair Corralation between INDO-RAMA SYNTHETIC and AIR PRODCHEMICALS

If you would invest  25,501  in AIR PRODCHEMICALS on September 14, 2024 and sell it today you would earn a total of  4,249  from holding AIR PRODCHEMICALS or generate 16.66% return on investment over 90 days.

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

INDO RAMA SYNTHETIC  vs.  AIR PRODCHEMICALS

INDO RAMA SYNTHETIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INDO RAMA SYNTHETIC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, INDO-RAMA SYNTHETIC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

AIR PRODCHEMICALS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AIR PRODCHEMICALS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AIR PRODCHEMICALS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INDO-RAMA SYNTHETIC and AIR PRODCHEMICALS

The main advantage of trading using opposite INDO-RAMA SYNTHETIC and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDO-RAMA SYNTHETIC position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.

The idea behind INDO RAMA SYNTHETIC and AIR PRODCHEMICALS 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.