Correlation Between Arinsiri Land and Frasers Property

Can any of the company-specific risk be diversified away by investing in both Arinsiri Land and Frasers Property 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 Arinsiri Land and Frasers Property into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arinsiri Land Public and Frasers Property Public, you can compare the effects of market volatilities on Arinsiri Land and Frasers Property 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 Arinsiri Land with a short position of Frasers Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arinsiri Land and Frasers Property.

Diversification Opportunities for Arinsiri Land and Frasers Property

0.67

Correlation Coefficient

Arinsiri Land  Frasers Property

Poor diversification

The 3 months correlation between Arinsiri and Frasers is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Arinsiri Land Public and Frasers Property Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frasers Property Public and Arinsiri Land 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 Arinsiri Land Public are associated (or correlated) with Frasers Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frasers Property Public has no effect on the direction of Arinsiri Land i.e., Arinsiri Land and Frasers Property go up and down completely randomly.

Pair Corralation between Arinsiri Land and Frasers Property

Assuming the 90 days trading horizon Arinsiri Land Public is expected to under-perform the Frasers Property. In addition to that, Arinsiri Land is 1.04 times more volatile than Frasers Property Public. It trades about -0.46 of its total potential returns per unit of risk. Frasers Property Public is currently generating about -0.05 per unit of volatility. If you would invest  1,250  in Frasers Property Public on September 24, 2024 and sell it today you would lose (40.00) from holding Frasers Property Public or give up 3.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Arinsiri Land Public  vs.  Frasers Property Public

Arinsiri Land Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arinsiri Land Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Frasers Property Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frasers Property Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Frasers Property is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Arinsiri Land and Frasers Property

The main advantage of trading using opposite Arinsiri Land and Frasers Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arinsiri Land position performs unexpectedly, Frasers Property 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 Frasers Property will offset losses from the drop in Frasers Property's long position.

The idea behind Arinsiri Land Public and Frasers Property Public 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.