Correlation Between Som Distilleries and Indo Rama

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

By analyzing existing cross correlation between Som Distilleries Breweries and Indo Rama Synthetics, you can compare the effects of market volatilities on Som Distilleries and Indo Rama 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 Som Distilleries with a short position of Indo Rama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Som Distilleries and Indo Rama.

Diversification Opportunities for Som Distilleries and Indo Rama

0.83

Correlation Coefficient

Som Distilleries  Indo Rama

Very poor diversification

The 3 months correlation between Som and Indo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Som Distilleries Breweries and Indo Rama Synthetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Rama Synthetics and Som Distilleries 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 Som Distilleries Breweries are associated (or correlated) with Indo Rama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Rama Synthetics has no effect on the direction of Som Distilleries i.e., Som Distilleries and Indo Rama go up and down completely randomly.

Pair Corralation between Som Distilleries and Indo Rama

Assuming the 90 days trading horizon Som Distilleries Breweries is expected to generate 0.79 times more return on investment than Indo Rama. However, Som Distilleries Breweries is 1.27 times less risky than Indo Rama. It trades about 0.06 of its potential returns per unit of risk. Indo Rama Synthetics is currently generating about -0.04 per unit of risk. If you would invest  15,300  in Som Distilleries Breweries on April 6, 2025 and sell it today you would earn a total of  369.00  from holding Som Distilleries Breweries or generate 2.41% return on investment over 90 days.

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

Som Distilleries Breweries  vs.  Indo Rama Synthetics

Som Distilleries Bre

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Som Distilleries Breweries are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Som Distilleries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Indo Rama Synthetics

Risk-Adjusted Performance

Good

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

Pair Trading with Som Distilleries and Indo Rama

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

The idea behind Som Distilleries Breweries and Indo Rama Synthetics 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 CEOs Directory module to screen CEOs from public companies around the world.