Correlation Between Micro Leasing and Shangri La
Can any of the company-specific risk be diversified away by investing in both Micro Leasing and Shangri La 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 Micro Leasing and Shangri La into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micro Leasing Public and Shangri La Hotel Public, you can compare the effects of market volatilities on Micro Leasing and Shangri La 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 Micro Leasing with a short position of Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micro Leasing and Shangri La.
Diversification Opportunities for Micro Leasing and Shangri La
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Micro and Shangri is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Micro Leasing Public and Shangri La Hotel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotel and Micro Leasing 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 Micro Leasing Public are associated (or correlated) with Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotel has no effect on the direction of Micro Leasing i.e., Micro Leasing and Shangri La go up and down completely randomly.
Pair Corralation between Micro Leasing and Shangri La
Assuming the 90 days trading horizon Micro Leasing Public is expected to generate 2.2 times more return on investment than Shangri La. However, Micro Leasing is 2.2 times more volatile than Shangri La Hotel Public. It trades about 0.11 of its potential returns per unit of risk. Shangri La Hotel Public is currently generating about -0.24 per unit of risk. If you would invest 96.00 in Micro Leasing Public on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Micro Leasing Public or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Micro Leasing Public vs. Shangri La Hotel Public
Performance |
| Timeline |
| Micro Leasing Public |
| Shangri La Hotel |
Micro Leasing and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micro Leasing and Shangri La
The main advantage of trading using opposite Micro Leasing and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micro Leasing position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La's long position.| Micro Leasing vs. Amanah Leasing Public | Micro Leasing vs. Muangthai Capital Public | Micro Leasing vs. Infraset Public | Micro Leasing vs. JMT Network Services |
| Shangri La vs. Siri Prime Office | Shangri La vs. Delta Electronics Public | Shangri La vs. Communication System Solution | Shangri La vs. Hana Microelectronics 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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