Correlation Between Amata Summit and Centara Hotels
Can any of the company-specific risk be diversified away by investing in both Amata Summit and Centara Hotels 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 Amata Summit and Centara Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amata Summit Growth and Centara Hotels Resorts, you can compare the effects of market volatilities on Amata Summit and Centara Hotels 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 Amata Summit with a short position of Centara Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amata Summit and Centara Hotels.
Diversification Opportunities for Amata Summit and Centara Hotels
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Amata and Centara is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Amata Summit Growth and Centara Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centara Hotels Resorts and Amata Summit 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 Amata Summit Growth are associated (or correlated) with Centara Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centara Hotels Resorts has no effect on the direction of Amata Summit i.e., Amata Summit and Centara Hotels go up and down completely randomly.
Pair Corralation between Amata Summit and Centara Hotels
Assuming the 90 days trading horizon Amata Summit is expected to generate 276.73 times less return on investment than Centara Hotels. But when comparing it to its historical volatility, Amata Summit Growth is 324.42 times less risky than Centara Hotels. It trades about 0.23 of its potential returns per unit of risk. Centara Hotels Resorts is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 452.00 in Centara Hotels Resorts on September 3, 2024 and sell it today you would earn a total of 6.00 from holding Centara Hotels Resorts or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amata Summit Growth vs. Centara Hotels Resorts
Performance |
| Timeline |
| Amata Summit Growth |
| Centara Hotels Resorts |
Amata Summit and Centara Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amata Summit and Centara Hotels
The main advantage of trading using opposite Amata Summit and Centara Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amata Summit position performs unexpectedly, Centara Hotels 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 Centara Hotels will offset losses from the drop in Centara Hotels' long position.| Amata Summit vs. WHA Premium Growth | Amata Summit vs. AIM Industrial Growth | Amata Summit vs. Bangkok Commercial Property | Amata Summit vs. Quality Houses Property |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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