Correlation Between Grande Asset and Grand Prix
Can any of the company-specific risk be diversified away by investing in both Grande Asset and Grand Prix 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 Grande Asset and Grand Prix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grande Asset Hotels and Grand Prix International, you can compare the effects of market volatilities on Grande Asset and Grand Prix 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 Grande Asset with a short position of Grand Prix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Asset and Grand Prix.
Diversification Opportunities for Grande Asset and Grand Prix
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grande and Grand is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Grande Asset Hotels and Grand Prix International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Prix International and Grande Asset 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 Grande Asset Hotels are associated (or correlated) with Grand Prix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Prix International has no effect on the direction of Grande Asset i.e., Grande Asset and Grand Prix go up and down completely randomly.
Pair Corralation between Grande Asset and Grand Prix
Assuming the 90 days trading horizon Grande Asset Hotels is expected to generate 1.01 times more return on investment than Grand Prix. However, Grande Asset is 1.01 times more volatile than Grand Prix International. It trades about 0.08 of its potential returns per unit of risk. Grand Prix International is currently generating about 0.08 per unit of risk. If you would invest 9.00 in Grande Asset Hotels on November 28, 2024 and sell it today you would lose (4.00) from holding Grande Asset Hotels or give up 44.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.18% |
| Values | Daily Returns |
Grande Asset Hotels vs. Grand Prix International
Performance |
| Timeline |
| Grande Asset Hotels |
| Grand Prix International |
Grande Asset and Grand Prix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Asset and Grand Prix
The main advantage of trading using opposite Grande Asset and Grand Prix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Asset position performs unexpectedly, Grand Prix 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 Grand Prix will offset losses from the drop in Grand Prix's long position.| Grande Asset vs. Internet Thailand Public | Grande Asset vs. Saksiam Leasing Public | Grande Asset vs. Quality Hospitality Leasehold | Grande Asset vs. Mitsib Leasing Public |
| Grand Prix vs. Interlink Communication Public | Grand Prix vs. Aqua Public | Grand Prix vs. BEC World Public | Grand Prix vs. Grande Asset Hotels |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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