Correlation Between Lotus Retail and ASIA Capital
Can any of the company-specific risk be diversified away by investing in both Lotus Retail and ASIA Capital 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 Lotus Retail and ASIA Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotus Retail Growth and ASIA Capital Group, you can compare the effects of market volatilities on Lotus Retail and ASIA Capital 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 Lotus Retail with a short position of ASIA Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotus Retail and ASIA Capital.
Diversification Opportunities for Lotus Retail and ASIA Capital
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotus and ASIA is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lotus Retail Growth and ASIA Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASIA Capital Group and Lotus Retail 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 Lotus Retail Growth are associated (or correlated) with ASIA Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASIA Capital Group has no effect on the direction of Lotus Retail i.e., Lotus Retail and ASIA Capital go up and down completely randomly.
Pair Corralation between Lotus Retail and ASIA Capital
Assuming the 90 days trading horizon Lotus Retail is expected to generate 88.35 times less return on investment than ASIA Capital. But when comparing it to its historical volatility, Lotus Retail Growth is 53.28 times less risky than ASIA Capital. It trades about 0.03 of its potential returns per unit of risk. ASIA Capital Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 77.00 in ASIA Capital Group on August 31, 2024 and sell it today you would lose (77.00) from holding ASIA Capital Group or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.13% |
| Values | Daily Returns |
Lotus Retail Growth vs. ASIA Capital Group
Performance |
| Timeline |
| Lotus Retail Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ASIA Capital Group |
Lotus Retail and ASIA Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotus Retail and ASIA Capital
The main advantage of trading using opposite Lotus Retail and ASIA Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotus Retail position performs unexpectedly, ASIA Capital 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 Capital will offset losses from the drop in ASIA Capital's long position.| Lotus Retail vs. CPN Retail Growth | Lotus Retail vs. Ticon Freehold and | Lotus Retail vs. WHA Premium Growth | Lotus Retail vs. Major Cineplex Lifestyle |
| ASIA Capital vs. Kiatnakin Phatra Bank | ASIA Capital vs. Bangkok Dusit Medical | ASIA Capital vs. Bhiraj Office Leasehold | ASIA Capital vs. Asia Sermkij Leasing |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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