Correlation Between Grand Canal and SCB X
Can any of the company-specific risk be diversified away by investing in both Grand Canal and SCB X 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 Grand Canal and SCB X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Canal Land and SCB X Public, you can compare the effects of market volatilities on Grand Canal and SCB X 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 Grand Canal with a short position of SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canal and SCB X.
Diversification Opportunities for Grand Canal and SCB X
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grand and SCB is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canal Land and SCB X Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCB X Public and Grand Canal 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 Grand Canal Land are associated (or correlated) with SCB X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCB X Public has no effect on the direction of Grand Canal i.e., Grand Canal and SCB X go up and down completely randomly.
Pair Corralation between Grand Canal and SCB X
Assuming the 90 days trading horizon Grand Canal Land is expected to generate 2.91 times more return on investment than SCB X. However, Grand Canal is 2.91 times more volatile than SCB X Public. It trades about 0.21 of its potential returns per unit of risk. SCB X Public is currently generating about 0.0 per unit of risk. If you would invest 154.00 in Grand Canal Land on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Grand Canal Land or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canal Land vs. SCB X Public
Performance |
| Timeline |
| Grand Canal Land |
| SCB X Public |
Grand Canal and SCB X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canal and SCB X
The main advantage of trading using opposite Grand Canal and SCB X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canal position performs unexpectedly, SCB X 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 SCB X will offset losses from the drop in SCB X's long position.The idea behind Grand Canal Land and SCB X Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SCB X vs. Thai Energy Storage | SCB X vs. Royal Orchid Hotel | SCB X vs. Grand Canal Land | SCB X vs. PRG Public |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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