Correlation Between Jack Chia and Laguna Resorts
Can any of the company-specific risk be diversified away by investing in both Jack Chia 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 Jack Chia and Laguna Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jack Chia Industries and Laguna Resorts Hotels, you can compare the effects of market volatilities on Jack Chia 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 Jack Chia with a short position of Laguna Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack Chia and Laguna Resorts.
Diversification Opportunities for Jack Chia and Laguna Resorts
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jack and Laguna is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Jack Chia Industries 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 Jack Chia 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 Jack Chia Industries 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 Jack Chia i.e., Jack Chia and Laguna Resorts go up and down completely randomly.
Pair Corralation between Jack Chia and Laguna Resorts
Assuming the 90 days trading horizon Jack Chia Industries is expected to under-perform the Laguna Resorts. But the stock apears to be less risky and, when comparing its historical volatility, Jack Chia Industries is 3.83 times less risky than Laguna Resorts. The stock trades about -0.08 of its potential returns per unit of risk. The Laguna Resorts Hotels is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,900 in Laguna Resorts Hotels on November 29, 2024 and sell it today you would earn a total of 75.00 from holding Laguna Resorts Hotels or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jack Chia Industries vs. Laguna Resorts Hotels
Performance |
| Timeline |
| Jack Chia Industries |
| Laguna Resorts Hotels |
Jack Chia and Laguna Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jack Chia and Laguna Resorts
The main advantage of trading using opposite Jack Chia and Laguna Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack Chia 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.| Jack Chia vs. Kang Yong Electric | Jack Chia vs. Krungdhep Sophon Public | Jack Chia vs. KGI Securities Public | Jack Chia vs. Inoue Rubber Public |
| Laguna Resorts vs. OHTL Public | Laguna Resorts vs. LPN Development Public | Laguna Resorts vs. The Erawan Group | Laguna Resorts vs. MBK 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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