Correlation Between CK Power and Quality Houses
Can any of the company-specific risk be diversified away by investing in both CK Power and Quality Houses 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 CK Power and Quality Houses into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Power Public and Quality Houses Hotel, you can compare the effects of market volatilities on CK Power and Quality Houses 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 CK Power with a short position of Quality Houses. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Quality Houses.
Diversification Opportunities for CK Power and Quality Houses
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between CKP and Quality is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public and Quality Houses Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quality Houses Hotel and CK Power 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 CK Power Public are associated (or correlated) with Quality Houses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quality Houses Hotel has no effect on the direction of CK Power i.e., CK Power and Quality Houses go up and down completely randomly.
Pair Corralation between CK Power and Quality Houses
Assuming the 90 days trading horizon CK Power Public is expected to under-perform the Quality Houses. But the stock apears to be less risky and, when comparing its historical volatility, CK Power Public is 24.97 times less risky than Quality Houses. The stock trades about -0.03 of its potential returns per unit of risk. The Quality Houses Hotel is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Quality Houses Hotel on September 3, 2024 and sell it today you would lose (575.00) from holding Quality Houses Hotel or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
CK Power Public vs. Quality Houses Hotel
Performance |
| Timeline |
| CK Power Public |
| Quality Houses Hotel |
CK Power and Quality Houses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Power and Quality Houses
The main advantage of trading using opposite CK Power and Quality Houses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Power position performs unexpectedly, Quality Houses 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 Quality Houses will offset losses from the drop in Quality Houses' long position.| CK Power vs. Energy Absolute Public | CK Power vs. BCPG Public | CK Power vs. Bangkok Expressway and | CK Power vs. Gulf Energy Development |
| Quality Houses vs. Quality Houses Property | Quality Houses vs. Land and Houses | Quality Houses vs. WHA Premium Growth | Quality Houses vs. LH Hotel Leasehold |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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