Correlation Between Dusit Thani and Sri Panwa

Can any of the company-specific risk be diversified away by investing in both Dusit Thani and Sri Panwa 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 Sri Panwa 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 Sri panwa Hospitality, you can compare the effects of market volatilities on Dusit Thani and Sri Panwa 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 Sri Panwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dusit Thani and Sri Panwa.

Diversification Opportunities for Dusit Thani and Sri Panwa

0.32

Correlation Coefficient

Dusit Thani  Sri Panwa

Weak diversification

The 3 months correlation between Dusit and Sri is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dusit Thani Freehold and Sri panwa Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri panwa Hospitality 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 Sri Panwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri panwa Hospitality has no effect on the direction of Dusit Thani i.e., Dusit Thani and Sri Panwa go up and down completely randomly.

Pair Corralation between Dusit Thani and Sri Panwa

Assuming the 90 days trading horizon Dusit Thani Freehold is expected to under-perform the Sri Panwa. But the stock apears to be less risky and, when comparing its historical volatility, Dusit Thani Freehold is 1.12 times less risky than Sri Panwa. The stock trades about 0.0 of its potential returns per unit of risk. The Sri panwa Hospitality is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  506.00  in Sri panwa Hospitality on September 12, 2024 and sell it today you would earn a total of  64.00  from holding Sri panwa Hospitality or generate 12.65% return on investment over 90 days.

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

Dusit Thani Freehold  vs.  Sri panwa Hospitality

Dusit Thani Freehold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dusit Thani Freehold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Dusit Thani is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Sri panwa Hospitality

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sri panwa Hospitality are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Sri Panwa showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dusit Thani and Sri Panwa

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

The idea behind Dusit Thani Freehold and Sri panwa Hospitality 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 Commodity Directory module to find actively traded commodities issued by global exchanges.