Correlation Between Quality Houses and Lanna Resources
Can any of the company-specific risk be diversified away by investing in both Quality Houses and Lanna Resources 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 Quality Houses and Lanna Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quality Houses Hotel and Lanna Resources Public, you can compare the effects of market volatilities on Quality Houses and Lanna Resources 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 Quality Houses with a short position of Lanna Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quality Houses and Lanna Resources.
Diversification Opportunities for Quality Houses and Lanna Resources
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Quality and Lanna is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Quality Houses Hotel and Lanna Resources Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanna Resources Public and Quality Houses 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 Quality Houses Hotel are associated (or correlated) with Lanna Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanna Resources Public has no effect on the direction of Quality Houses i.e., Quality Houses and Lanna Resources go up and down completely randomly.
Pair Corralation between Quality Houses and Lanna Resources
Assuming the 90 days trading horizon Quality Houses Hotel is expected to generate 35.16 times more return on investment than Lanna Resources. However, Quality Houses is 35.16 times more volatile than Lanna Resources Public. It trades about 0.04 of its potential returns per unit of risk. Lanna Resources Public is currently generating about 0.04 per unit of risk. If you would invest 575.00 in Quality Houses Hotel on September 3, 2024 and sell it today you would lose (575.00) from holding Quality Houses Hotel or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Quality Houses Hotel vs. Lanna Resources Public
Performance |
| Timeline |
| Quality Houses Hotel |
| Lanna Resources Public |
Quality Houses and Lanna Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quality Houses and Lanna Resources
The main advantage of trading using opposite Quality Houses and Lanna Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quality Houses position performs unexpectedly, Lanna Resources 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 Lanna Resources will offset losses from the drop in Lanna Resources' long position.| Quality Houses vs. Quality Houses Property | Quality Houses vs. Land and Houses | Quality Houses vs. WHA Premium Growth | Quality Houses vs. LH Hotel Leasehold |
| Lanna Resources vs. PTT Public | Lanna Resources vs. SCB X Public | Lanna Resources vs. The Siam Commercial | Lanna Resources vs. The Siam Cement |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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