Correlation Between Laguna Resorts and Krungdhep Sophon
Can any of the company-specific risk be diversified away by investing in both Laguna Resorts and Krungdhep Sophon 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 Laguna Resorts and Krungdhep Sophon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laguna Resorts Hotels and Krungdhep Sophon Public, you can compare the effects of market volatilities on Laguna Resorts and Krungdhep Sophon 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 Laguna Resorts with a short position of Krungdhep Sophon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laguna Resorts and Krungdhep Sophon.
Diversification Opportunities for Laguna Resorts and Krungdhep Sophon
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Laguna and Krungdhep is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Laguna Resorts Hotels and Krungdhep Sophon Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krungdhep Sophon Public and Laguna Resorts 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 Laguna Resorts Hotels are associated (or correlated) with Krungdhep Sophon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krungdhep Sophon Public has no effect on the direction of Laguna Resorts i.e., Laguna Resorts and Krungdhep Sophon go up and down completely randomly.
Pair Corralation between Laguna Resorts and Krungdhep Sophon
Assuming the 90 days trading horizon Laguna Resorts Hotels is expected to generate 0.22 times more return on investment than Krungdhep Sophon. However, Laguna Resorts Hotels is 4.5 times less risky than Krungdhep Sophon. It trades about 0.09 of its potential returns per unit of risk. Krungdhep Sophon Public is currently generating about 0.01 per unit of risk. If you would invest 3,725 in Laguna Resorts Hotels on September 18, 2024 and sell it today you would earn a total of 200.00 from holding Laguna Resorts Hotels or generate 5.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Laguna Resorts Hotels vs. Krungdhep Sophon Public
Performance |
Timeline |
Laguna Resorts Hotels |
Krungdhep Sophon Public |
Laguna Resorts and Krungdhep Sophon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Laguna Resorts and Krungdhep Sophon
The main advantage of trading using opposite Laguna Resorts and Krungdhep Sophon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laguna Resorts position performs unexpectedly, Krungdhep Sophon 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 Krungdhep Sophon will offset losses from the drop in Krungdhep Sophon's long position.Laguna Resorts vs. OHTL Public | Laguna Resorts vs. LPN Development Public | Laguna Resorts vs. The Erawan Group | Laguna Resorts vs. MBK 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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