Correlation Between Bualuang Office and JCK Hospitality

Can any of the company-specific risk be diversified away by investing in both Bualuang Office and JCK Hospitality 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 Bualuang Office and JCK Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bualuang Office Leasehold and JCK Hospitality Public, you can compare the effects of market volatilities on Bualuang Office and JCK Hospitality 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 Bualuang Office with a short position of JCK Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bualuang Office and JCK Hospitality.

Diversification Opportunities for Bualuang Office and JCK Hospitality

0.29

Correlation Coefficient

Bualuang Office  JCK Hospitality

Modest diversification

The 3 months correlation between Bualuang and JCK is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bualuang Office Leasehold and JCK Hospitality Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCK Hospitality Public and Bualuang Office 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 Bualuang Office Leasehold are associated (or correlated) with JCK Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCK Hospitality Public has no effect on the direction of Bualuang Office i.e., Bualuang Office and JCK Hospitality go up and down completely randomly.

Pair Corralation between Bualuang Office and JCK Hospitality

Assuming the 90 days trading horizon Bualuang Office Leasehold is expected to under-perform the JCK Hospitality. But the stock apears to be less risky and, when comparing its historical volatility, Bualuang Office Leasehold is 1.06 times less risky than JCK Hospitality. The stock trades about -0.13 of its potential returns per unit of risk. The JCK Hospitality Public is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  45.00  in JCK Hospitality Public on December 30, 2024 and sell it today you would lose (24.00) from holding JCK Hospitality Public or give up 53.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Bualuang Office Leasehold  vs.  JCK Hospitality Public

Bualuang Office Leasehold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bualuang Office Leasehold 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 basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

JCK Hospitality Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days JCK Hospitality 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bualuang Office and JCK Hospitality

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

The idea behind Bualuang Office Leasehold and JCK Hospitality 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.