Correlation Between Central Plaza and S Hotels
Can any of the company-specific risk be diversified away by investing in both Central Plaza and S 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 Central Plaza and S Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Plaza Hotel and S Hotels and, you can compare the effects of market volatilities on Central Plaza and S 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 Central Plaza with a short position of S Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Plaza and S Hotels.
Diversification Opportunities for Central Plaza and S Hotels
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Central and SHR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Central Plaza Hotel and S Hotels and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S Hotels and Central Plaza 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 Central Plaza Hotel are associated (or correlated) with S Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S Hotels has no effect on the direction of Central Plaza i.e., Central Plaza and S Hotels go up and down completely randomly.
Pair Corralation between Central Plaza and S Hotels
Assuming the 90 days trading horizon Central Plaza Hotel is expected to generate 0.86 times more return on investment than S Hotels. However, Central Plaza Hotel is 1.16 times less risky than S Hotels. It trades about -0.02 of its potential returns per unit of risk. S Hotels and is currently generating about -0.04 per unit of risk. If you would invest 4,804 in Central Plaza Hotel on August 27, 2024 and sell it today you would lose (1,004) from holding Central Plaza Hotel or give up 20.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Plaza Hotel vs. S Hotels and
Performance |
| Timeline |
| Central Plaza Hotel |
| S Hotels |
Central Plaza and S Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Plaza and S Hotels
The main advantage of trading using opposite Central Plaza and S Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Plaza position performs unexpectedly, S 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 S Hotels will offset losses from the drop in S Hotels' long position.| Central Plaza vs. Minor International Public | Central Plaza vs. Central Pattana Public | Central Plaza vs. CP ALL Public | Central Plaza vs. Bangkok Dusit Medical |
| S Hotels vs. Central Plaza Hotel | S Hotels vs. The Erawan Group | S Hotels vs. Minor International Public | S Hotels 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |