Correlation Between JCK Hospitality and Asia Biomass
Can any of the company-specific risk be diversified away by investing in both JCK Hospitality and Asia Biomass 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 JCK Hospitality and Asia Biomass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JCK Hospitality Public and Asia Biomass Public, you can compare the effects of market volatilities on JCK Hospitality and Asia Biomass 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 JCK Hospitality with a short position of Asia Biomass. Check out your portfolio center. Please also check ongoing floating volatility patterns of JCK Hospitality and Asia Biomass.
Diversification Opportunities for JCK Hospitality and Asia Biomass
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JCK and Asia is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding JCK Hospitality Public and Asia Biomass Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Biomass Public and JCK 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 JCK Hospitality Public are associated (or correlated) with Asia Biomass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Biomass Public has no effect on the direction of JCK Hospitality i.e., JCK Hospitality and Asia Biomass go up and down completely randomly.
Pair Corralation between JCK Hospitality and Asia Biomass
Assuming the 90 days trading horizon JCK Hospitality Public is expected to generate 1.06 times more return on investment than Asia Biomass. However, JCK Hospitality is 1.06 times more volatile than Asia Biomass Public. It trades about 0.06 of its potential returns per unit of risk. Asia Biomass Public is currently generating about 0.04 per unit of risk. If you would invest 13.00 in JCK Hospitality Public on September 2, 2024 and sell it today you would lose (11.00) from holding JCK Hospitality Public or give up 84.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JCK Hospitality Public vs. Asia Biomass Public
Performance |
| Timeline |
| JCK Hospitality Public |
| Asia Biomass Public |
JCK Hospitality and Asia Biomass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JCK Hospitality and Asia Biomass
The main advantage of trading using opposite JCK Hospitality and Asia Biomass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JCK Hospitality position performs unexpectedly, Asia Biomass 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 Asia Biomass will offset losses from the drop in Asia Biomass' long position.| JCK Hospitality vs. CP ALL Public | JCK Hospitality vs. BTS Group Holdings | JCK Hospitality vs. Minor International Public | JCK Hospitality vs. Airports of Thailand |
| Asia Biomass vs. Super Energy | Asia Biomass vs. The Erawan Group | Asia Biomass vs. Autocorp Holding Public | Asia Biomass vs. Ditto 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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