Correlation Between Unique Mining and Royal Orchid
Can any of the company-specific risk be diversified away by investing in both Unique Mining and Royal Orchid 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 Unique Mining and Royal Orchid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unique Mining Services and Royal Orchid Hotel, you can compare the effects of market volatilities on Unique Mining and Royal Orchid 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 Unique Mining with a short position of Royal Orchid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unique Mining and Royal Orchid.
Diversification Opportunities for Unique Mining and Royal Orchid
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Unique and Royal is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Unique Mining Services and Royal Orchid Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Orchid Hotel and Unique Mining 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 Unique Mining Services are associated (or correlated) with Royal Orchid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Orchid Hotel has no effect on the direction of Unique Mining i.e., Unique Mining and Royal Orchid go up and down completely randomly.
Pair Corralation between Unique Mining and Royal Orchid
Assuming the 90 days trading horizon Unique Mining Services is expected to generate 1.0 times more return on investment than Royal Orchid. However, Unique Mining is 1.0 times more volatile than Royal Orchid Hotel. It trades about 0.05 of its potential returns per unit of risk. Royal Orchid Hotel is currently generating about 0.05 per unit of risk. If you would invest 94.00 in Unique Mining Services on August 28, 2024 and sell it today you would lose (47.00) from holding Unique Mining Services or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unique Mining Services vs. Royal Orchid Hotel
Performance |
| Timeline |
| Unique Mining Services |
| Royal Orchid Hotel |
Unique Mining and Royal Orchid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unique Mining and Royal Orchid
The main advantage of trading using opposite Unique Mining and Royal Orchid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unique Mining position performs unexpectedly, Royal Orchid 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 Royal Orchid will offset losses from the drop in Royal Orchid's long position.| Unique Mining vs. Union Petrochemical Public | Unique Mining vs. Eureka Design Public | Unique Mining vs. Winner Group Enterprise | Unique Mining vs. Ubis Public |
| Royal Orchid vs. Central Retail | Royal Orchid vs. Gulf Energy Development | Royal Orchid vs. BTS Group Holdings | Royal Orchid vs. Bangkok Expressway and |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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