Correlation Between DiamondRock Hospitality and Kasikornbank Public
Can any of the company-specific risk be diversified away by investing in both DiamondRock Hospitality and Kasikornbank Public 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 DiamondRock Hospitality and Kasikornbank Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DiamondRock Hospitality and Kasikornbank Public, you can compare the effects of market volatilities on DiamondRock Hospitality and Kasikornbank Public 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 DiamondRock Hospitality with a short position of Kasikornbank Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of DiamondRock Hospitality and Kasikornbank Public.
Diversification Opportunities for DiamondRock Hospitality and Kasikornbank Public
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DiamondRock and Kasikornbank is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding DiamondRock Hospitality and Kasikornbank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasikornbank Public and DiamondRock Hospitality 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 DiamondRock Hospitality are associated (or correlated) with Kasikornbank Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kasikornbank Public has no effect on the direction of DiamondRock Hospitality i.e., DiamondRock Hospitality and Kasikornbank Public go up and down completely randomly.
Pair Corralation between DiamondRock Hospitality and Kasikornbank Public
Assuming the 90 days horizon DiamondRock Hospitality is expected to generate 1.92 times less return on investment than Kasikornbank Public. But when comparing it to its historical volatility, DiamondRock Hospitality is 1.03 times less risky than Kasikornbank Public. It trades about 0.03 of its potential returns per unit of risk. Kasikornbank Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 198.00 in Kasikornbank Public on September 12, 2024 and sell it today you would earn a total of 230.00 from holding Kasikornbank Public or generate 116.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DiamondRock Hospitality vs. Kasikornbank Public
Performance |
| Timeline |
| DiamondRock Hospitality |
| Kasikornbank Public |
DiamondRock Hospitality and Kasikornbank Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DiamondRock Hospitality and Kasikornbank Public
The main advantage of trading using opposite DiamondRock Hospitality and Kasikornbank Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DiamondRock Hospitality position performs unexpectedly, Kasikornbank Public 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 Kasikornbank Public will offset losses from the drop in Kasikornbank Public's long position.| DiamondRock Hospitality vs. BRAEMAR HOTELS RES | DiamondRock Hospitality vs. Sotherly Hotels | DiamondRock Hospitality vs. Superior Plus Corp | DiamondRock Hospitality vs. SIVERS SEMICONDUCTORS AB |
| Kasikornbank Public vs. POSBO UNSPADRS20YC1 | Kasikornbank Public vs. Postal Savings Bank | Kasikornbank Public vs. UTD OV BK LOC ADR1 | Kasikornbank Public vs. Superior Plus Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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