Correlation Between Better World and Grande Asset
Can any of the company-specific risk be diversified away by investing in both Better World and Grande Asset 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 Better World and Grande Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Better World Green and Grande Asset Hotels, you can compare the effects of market volatilities on Better World and Grande Asset 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 Better World with a short position of Grande Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Better World and Grande Asset.
Diversification Opportunities for Better World and Grande Asset
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Better and Grande is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Better World Green and Grande Asset Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Asset Hotels and Better World 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 Better World Green are associated (or correlated) with Grande Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Asset Hotels has no effect on the direction of Better World i.e., Better World and Grande Asset go up and down completely randomly.
Pair Corralation between Better World and Grande Asset
Assuming the 90 days trading horizon Better World Green is expected to under-perform the Grande Asset. But the stock apears to be less risky and, when comparing its historical volatility, Better World Green is 18.39 times less risky than Grande Asset. The stock trades about -0.01 of its potential returns per unit of risk. The Grande Asset Hotels is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Grande Asset Hotels on August 29, 2024 and sell it today you would lose (4.00) from holding Grande Asset Hotels or give up 30.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Better World Green vs. Grande Asset Hotels
Performance |
| Timeline |
| Better World Green |
| Grande Asset Hotels |
Better World and Grande Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Better World and Grande Asset
The main advantage of trading using opposite Better World and Grande Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Better World position performs unexpectedly, Grande Asset 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 Grande Asset will offset losses from the drop in Grande Asset's long position.| Better World vs. Beauty Community Public | Better World vs. Demco Public | Better World vs. Asia Aviation Public | Better World vs. CK Power Public |
| Grande Asset vs. CP ALL Public | Grande Asset vs. Bangkok Dusit Medical | Grande Asset vs. Central Pattana Public | Grande Asset vs. Advanced Info Service |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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