Correlation Between Dusit Thani and Amata Summit

Can any of the company-specific risk be diversified away by investing in both Dusit Thani and Amata Summit 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 Dusit Thani and Amata Summit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dusit Thani Freehold and Amata Summit Growth, you can compare the effects of market volatilities on Dusit Thani and Amata Summit 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 Dusit Thani with a short position of Amata Summit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dusit Thani and Amata Summit.

Diversification Opportunities for Dusit Thani and Amata Summit

0.4

Correlation Coefficient

Dusit Thani  Amata Summit

Very weak diversification

The 3 months correlation between Dusit and Amata is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dusit Thani Freehold and Amata Summit Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amata Summit Growth and Dusit Thani 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 Dusit Thani Freehold are associated (or correlated) with Amata Summit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amata Summit Growth has no effect on the direction of Dusit Thani i.e., Dusit Thani and Amata Summit go up and down completely randomly.

Pair Corralation between Dusit Thani and Amata Summit

Assuming the 90 days trading horizon Dusit Thani Freehold is expected to generate 96.86 times more return on investment than Amata Summit. However, Dusit Thani is 96.86 times more volatile than Amata Summit Growth. It trades about 0.08 of its potential returns per unit of risk. Amata Summit Growth is currently generating about 0.08 per unit of risk. If you would invest  439.00  in Dusit Thani Freehold on September 3, 2024 and sell it today you would earn a total of  57.00  from holding Dusit Thani Freehold or generate 12.98% return on investment over 90 days.

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

Dusit Thani Freehold  vs.  Amata Summit Growth

Dusit Thani Freehold

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dusit Thani Freehold are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Dusit Thani sustained solid returns over the last few months and may actually be approaching a breakup point.

Amata Summit Growth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amata Summit Growth are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amata Summit may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dusit Thani and Amata Summit

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

The idea behind Dusit Thani Freehold and Amata Summit Growth 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.