Correlation Between MBK Public and Laguna Resorts
Can any of the company-specific risk be diversified away by investing in both MBK Public 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 MBK Public and Laguna Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MBK Public and Laguna Resorts Hotels, you can compare the effects of market volatilities on MBK Public 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 MBK Public with a short position of Laguna Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBK Public and Laguna Resorts.
Diversification Opportunities for MBK Public and Laguna Resorts
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MBK and Laguna is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding MBK 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 MBK Public 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 MBK 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 MBK Public i.e., MBK Public and Laguna Resorts go up and down completely randomly.
Pair Corralation between MBK Public and Laguna Resorts
Assuming the 90 days trading horizon MBK Public is expected to generate 37.99 times less return on investment than Laguna Resorts. But when comparing it to its historical volatility, MBK Public is 25.18 times less risky than Laguna Resorts. It trades about 0.03 of its potential returns per unit of risk. Laguna Resorts Hotels is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,125 in Laguna Resorts Hotels on September 3, 2024 and sell it today you would earn a total of 775.00 from holding Laguna Resorts Hotels or generate 24.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MBK Public vs. Laguna Resorts Hotels
Performance |
| Timeline |
| MBK Public |
| Laguna Resorts Hotels |
MBK Public and Laguna Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBK Public and Laguna Resorts
The main advantage of trading using opposite MBK Public and Laguna Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBK Public 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.| MBK Public vs. Land and Houses | MBK Public vs. Central Pattana Public | MBK Public vs. AP Public | MBK Public vs. Quality Houses 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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