Correlation Between Dynasty Ceramic and Major Cineplex
Can any of the company-specific risk be diversified away by investing in both Dynasty Ceramic and Major Cineplex 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 Dynasty Ceramic and Major Cineplex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynasty Ceramic Public and Major Cineplex Group, you can compare the effects of market volatilities on Dynasty Ceramic and Major Cineplex 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 Dynasty Ceramic with a short position of Major Cineplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynasty Ceramic and Major Cineplex.
Diversification Opportunities for Dynasty Ceramic and Major Cineplex
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dynasty and Major is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dynasty Ceramic Public and Major Cineplex Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Cineplex Group and Dynasty Ceramic 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 Dynasty Ceramic Public are associated (or correlated) with Major Cineplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Cineplex Group has no effect on the direction of Dynasty Ceramic i.e., Dynasty Ceramic and Major Cineplex go up and down completely randomly.
Pair Corralation between Dynasty Ceramic and Major Cineplex
Assuming the 90 days trading horizon Dynasty Ceramic Public is expected to under-perform the Major Cineplex. But the stock apears to be less risky and, when comparing its historical volatility, Dynasty Ceramic Public is 1.09 times less risky than Major Cineplex. The stock trades about -0.04 of its potential returns per unit of risk. The Major Cineplex Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,696 in Major Cineplex Group on September 12, 2024 and sell it today you would lose (216.00) from holding Major Cineplex Group or give up 12.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynasty Ceramic Public vs. Major Cineplex Group
Performance |
| Timeline |
| Dynasty Ceramic Public |
| Major Cineplex Group |
Dynasty Ceramic and Major Cineplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynasty Ceramic and Major Cineplex
The main advantage of trading using opposite Dynasty Ceramic and Major Cineplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynasty Ceramic position performs unexpectedly, Major Cineplex 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 Major Cineplex will offset losses from the drop in Major Cineplex's long position.| Dynasty Ceramic vs. Land and Houses | Dynasty Ceramic vs. AP Public | Dynasty Ceramic vs. Charoen Pokphand Foods | Dynasty Ceramic vs. Hana Microelectronics Public |
| Major Cineplex vs. Home Product Center | Major Cineplex vs. Land and Houses | Major Cineplex vs. Minor International Public | Major Cineplex 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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