Correlation Between Dynasty Ceramic and Asia Hotel
Can any of the company-specific risk be diversified away by investing in both Dynasty Ceramic and Asia Hotel 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 Dynasty Ceramic and Asia Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynasty Ceramic Public and Asia Hotel Public, you can compare the effects of market volatilities on Dynasty Ceramic and Asia Hotel 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 Dynasty Ceramic with a short position of Asia Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynasty Ceramic and Asia Hotel.
Diversification Opportunities for Dynasty Ceramic and Asia Hotel
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dynasty and Asia is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dynasty Ceramic Public and Asia Hotel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Hotel Public and Dynasty Ceramic 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 Dynasty Ceramic Public are associated (or correlated) with Asia Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Hotel Public has no effect on the direction of Dynasty Ceramic i.e., Dynasty Ceramic and Asia Hotel go up and down completely randomly.
Pair Corralation between Dynasty Ceramic and Asia Hotel
Assuming the 90 days trading horizon Dynasty Ceramic Public is expected to under-perform the Asia Hotel. In addition to that, Dynasty Ceramic is 1.55 times more volatile than Asia Hotel Public. It trades about -0.25 of its total potential returns per unit of risk. Asia Hotel Public is currently generating about -0.24 per unit of volatility. If you would invest 670.00 in Asia Hotel Public on December 4, 2024 and sell it today you would lose (145.00) from holding Asia Hotel Public or give up 21.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dynasty Ceramic Public vs. Asia Hotel Public
Performance |
Timeline |
Dynasty Ceramic Public |
Asia Hotel Public |
Dynasty Ceramic and Asia Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dynasty Ceramic and Asia Hotel
The main advantage of trading using opposite Dynasty Ceramic and Asia Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynasty Ceramic position performs unexpectedly, Asia Hotel 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 Asia Hotel will offset losses from the drop in Asia Hotel's long position.Dynasty Ceramic vs. Land and Houses | Dynasty Ceramic vs. AP Public | Dynasty Ceramic vs. Charoen Pokphand Foods | Dynasty Ceramic vs. Hana Microelectronics Public |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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