Correlation Between Dynasty Ceramic and Grande Asset

Can any of the company-specific risk be diversified away by investing in both Dynasty Ceramic and Grande Asset 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 Grande Asset 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 Grande Asset Hotels, you can compare the effects of market volatilities on Dynasty Ceramic and Grande Asset 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 Grande Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynasty Ceramic and Grande Asset.

Diversification Opportunities for Dynasty Ceramic and Grande Asset

0.5

Correlation Coefficient

Dynasty Ceramic  Grande Asset

Very weak diversification

The 3 months correlation between Dynasty and Grande is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dynasty Ceramic Public and Grande Asset Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Asset Hotels 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 Grande Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Asset Hotels has no effect on the direction of Dynasty Ceramic i.e., Dynasty Ceramic and Grande Asset go up and down completely randomly.

Pair Corralation between Dynasty Ceramic and Grande Asset

Assuming the 90 days trading horizon Dynasty Ceramic Public is expected to under-perform the Grande Asset. But the stock apears to be less risky and, when comparing its historical volatility, Dynasty Ceramic Public is 4.86 times less risky than Grande Asset. The stock trades about -0.1 of its potential returns per unit of risk. The Grande Asset Hotels is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  6.00  in Grande Asset Hotels on December 30, 2024 and sell it today you would lose (2.00) from holding Grande Asset Hotels or give up 33.33% of portfolio value over 90 days.

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

Dynasty Ceramic Public  vs.  Grande Asset Hotels

Dynasty Ceramic Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dynasty Ceramic Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators 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.

Grande Asset Hotels

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grande Asset Hotels are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Grande Asset sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dynasty Ceramic and Grande Asset

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

The idea behind Dynasty Ceramic Public and Grande Asset Hotels 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.