Correlation Between ICC International and Laguna Resorts
Can any of the company-specific risk be diversified away by investing in both ICC International and Laguna Resorts 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 ICC International and Laguna Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICC International Public and Laguna Resorts Hotels, you can compare the effects of market volatilities on ICC International and Laguna Resorts 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 ICC International with a short position of Laguna Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC International and Laguna Resorts.
Diversification Opportunities for ICC International and Laguna Resorts
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between ICC and Laguna is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ICC International Public and Laguna Resorts Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laguna Resorts Hotels and ICC International 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 ICC International Public are associated (or correlated) with Laguna Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laguna Resorts Hotels has no effect on the direction of ICC International i.e., ICC International and Laguna Resorts go up and down completely randomly.
Pair Corralation between ICC International and Laguna Resorts
Assuming the 90 days trading horizon ICC International Public is expected to under-perform the Laguna Resorts. In addition to that, ICC International is 2.7 times more volatile than Laguna Resorts Hotels. It trades about -0.12 of its total potential returns per unit of risk. Laguna Resorts Hotels is currently generating about 0.07 per unit of volatility. If you would invest 3,850 in Laguna Resorts Hotels on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Laguna Resorts Hotels or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ICC International Public vs. Laguna Resorts Hotels
Performance |
| Timeline |
| ICC International Public |
| Laguna Resorts Hotels |
ICC International and Laguna Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICC International and Laguna Resorts
The main advantage of trading using opposite ICC International and Laguna Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC International position performs unexpectedly, Laguna Resorts 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 Laguna Resorts will offset losses from the drop in Laguna Resorts' long position.| ICC International vs. Hana Microelectronics Public | ICC International vs. Hwa Fong Rubber | ICC International vs. Goodyear Public | ICC International vs. BEC World Public |
| Laguna Resorts vs. TRC Construction Public | Laguna Resorts vs. Bangkok Expressway and | Laguna Resorts vs. Lohakit Metal Public | Laguna Resorts vs. Gunkul Engineering 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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