Correlation Between Thai Wah and Laguna Resorts
Can any of the company-specific risk be diversified away by investing in both Thai Wah 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 Thai Wah and Laguna Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Wah Public and Laguna Resorts Hotels, you can compare the effects of market volatilities on Thai Wah 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 Thai Wah with a short position of Laguna Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Wah and Laguna Resorts.
Diversification Opportunities for Thai Wah and Laguna Resorts
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and Laguna is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Thai Wah 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 Thai Wah 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 Thai Wah 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 Thai Wah i.e., Thai Wah and Laguna Resorts go up and down completely randomly.
Pair Corralation between Thai Wah and Laguna Resorts
Assuming the 90 days trading horizon Thai Wah Public is expected to under-perform the Laguna Resorts. In addition to that, Thai Wah is 4.42 times more volatile than Laguna Resorts Hotels. It trades about -0.21 of its total potential returns per unit of risk. Laguna Resorts Hotels is currently generating about 0.0 per unit of volatility. If you would invest 3,925 in Laguna Resorts Hotels on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Laguna Resorts Hotels or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Wah Public vs. Laguna Resorts Hotels
Performance |
| Timeline |
| Thai Wah Public |
| Laguna Resorts Hotels |
Thai Wah and Laguna Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Wah and Laguna Resorts
The main advantage of trading using opposite Thai Wah and Laguna Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Wah 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.| Thai Wah vs. Information and Communication | Thai Wah vs. Power Solution Technologies | Thai Wah vs. Interlink Communication Public | Thai Wah vs. MFC Asset Management |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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