Correlation Between Origin Property and Peace Living
Can any of the company-specific risk be diversified away by investing in both Origin Property and Peace Living 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 Origin Property and Peace Living into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Property PCL and Peace Living PCL, you can compare the effects of market volatilities on Origin Property and Peace Living 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 Origin Property with a short position of Peace Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Property and Peace Living.
Diversification Opportunities for Origin Property and Peace Living
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Origin and Peace is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Origin Property PCL and Peace Living PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peace Living PCL and Origin Property 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 Origin Property PCL are associated (or correlated) with Peace Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peace Living PCL has no effect on the direction of Origin Property i.e., Origin Property and Peace Living go up and down completely randomly.
Pair Corralation between Origin Property and Peace Living
Assuming the 90 days trading horizon Origin Property PCL is expected to under-perform the Peace Living. In addition to that, Origin Property is 1.75 times more volatile than Peace Living PCL. It trades about -0.25 of its total potential returns per unit of risk. Peace Living PCL is currently generating about -0.23 per unit of volatility. If you would invest 280.00 in Peace Living PCL on September 5, 2024 and sell it today you would lose (24.00) from holding Peace Living PCL or give up 8.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Origin Property PCL vs. Peace Living PCL
Performance |
| Timeline |
| Origin Property PCL |
| Peace Living PCL |
Origin Property and Peace Living Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Property and Peace Living
The main advantage of trading using opposite Origin Property and Peace Living positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Property position performs unexpectedly, Peace Living 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 Peace Living will offset losses from the drop in Peace Living's long position.The idea behind Origin Property PCL and Peace Living PCL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Peace Living vs. Delta Electronics Public | Peace Living vs. Delta Electronics Public | Peace Living vs. Airports of Thailand | Peace Living vs. Airports of Thailand |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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