Correlation Between Grande Asset and TRC Construction
Can any of the company-specific risk be diversified away by investing in both Grande Asset and TRC Construction 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 TRC Construction 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 TRC Construction Public, you can compare the effects of market volatilities on Grande Asset and TRC Construction 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 TRC Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Asset and TRC Construction.
Diversification Opportunities for Grande Asset and TRC Construction
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grande and TRC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Grande Asset Hotels and TRC Construction Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRC Construction Public 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 TRC Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRC Construction Public has no effect on the direction of Grande Asset i.e., Grande Asset and TRC Construction go up and down completely randomly.
Pair Corralation between Grande Asset and TRC Construction
Assuming the 90 days trading horizon Grande Asset Hotels is expected to generate 10.17 times more return on investment than TRC Construction. However, Grande Asset is 10.17 times more volatile than TRC Construction Public. It trades about 0.07 of its potential returns per unit of risk. TRC Construction Public is currently generating about -0.04 per unit of risk. If you would invest 14.00 in Grande Asset Hotels on September 3, 2024 and sell it today you would lose (5.00) from holding Grande Asset Hotels or give up 35.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grande Asset Hotels vs. TRC Construction Public
Performance |
| Timeline |
| Grande Asset Hotels |
| TRC Construction Public |
Grande Asset and TRC Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Asset and TRC Construction
The main advantage of trading using opposite Grande Asset and TRC Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Asset position performs unexpectedly, TRC Construction 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 TRC Construction will offset losses from the drop in TRC Construction's long position.| Grande Asset vs. Central Pattana Public | Grande Asset vs. CP ALL Public | Grande Asset vs. Bangkok Dusit Medical | Grande Asset vs. Airports of Thailand |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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