Correlation Between Country Group and Land
Can any of the company-specific risk be diversified away by investing in both Country Group and Land 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 Country Group and Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Country Group Development and Land and Houses, you can compare the effects of market volatilities on Country Group and Land 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 Country Group with a short position of Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Group and Land.
Diversification Opportunities for Country Group and Land
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Country and Land is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Country Group Development and Land and Houses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land and Houses and Country Group 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 Country Group Development are associated (or correlated) with Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land and Houses has no effect on the direction of Country Group i.e., Country Group and Land go up and down completely randomly.
Pair Corralation between Country Group and Land
Assuming the 90 days trading horizon Country Group Development is expected to generate 1.61 times more return on investment than Land. However, Country Group is 1.61 times more volatile than Land and Houses. It trades about 0.01 of its potential returns per unit of risk. Land and Houses is currently generating about -0.07 per unit of risk. If you would invest 34.00 in Country Group Development on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Country Group Development or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Country Group Development vs. Land and Houses
Performance |
| Timeline |
| Country Group Development |
| Land and Houses |
Country Group and Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Country Group and Land
The main advantage of trading using opposite Country Group and Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Country Group position performs unexpectedly, Land 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 Land will offset losses from the drop in Land's long position.| Country Group vs. Land and Houses | Country Group vs. Bangkok Bank Public | Country Group vs. Charoen Pokphand Foods |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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