Correlation Between Ananda Development and Central Pattana
Can any of the company-specific risk be diversified away by investing in both Ananda Development and Central Pattana 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 Ananda Development and Central Pattana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ananda Development Public and Central Pattana Public, you can compare the effects of market volatilities on Ananda Development and Central Pattana 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 Ananda Development with a short position of Central Pattana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ananda Development and Central Pattana.
Diversification Opportunities for Ananda Development and Central Pattana
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ananda and Central is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ananda Development Public and Central Pattana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Pattana Public and Ananda Development 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 Ananda Development Public are associated (or correlated) with Central Pattana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Pattana Public has no effect on the direction of Ananda Development i.e., Ananda Development and Central Pattana go up and down completely randomly.
Pair Corralation between Ananda Development and Central Pattana
Assuming the 90 days trading horizon Ananda Development Public is expected to generate 29.69 times more return on investment than Central Pattana. However, Ananda Development is 29.69 times more volatile than Central Pattana Public. It trades about 0.04 of its potential returns per unit of risk. Central Pattana Public is currently generating about -0.02 per unit of risk. If you would invest 140.00 in Ananda Development Public on November 27, 2024 and sell it today you would lose (95.00) from holding Ananda Development Public or give up 67.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ananda Development Public vs. Central Pattana Public
Performance |
| Timeline |
| Ananda Development Public |
| Central Pattana Public |
Ananda Development and Central Pattana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ananda Development and Central Pattana
The main advantage of trading using opposite Ananda Development and Central Pattana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ananda Development position performs unexpectedly, Central Pattana 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 Central Pattana will offset losses from the drop in Central Pattana's long position.| Ananda Development vs. AP Public | Ananda Development vs. Siri Prime Office | Ananda Development vs. Quality Houses Public | Ananda Development vs. LPN Development Public |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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