Correlation Between Phatra Leasing and Central Plaza

Can any of the company-specific risk be diversified away by investing in both Phatra Leasing and Central Plaza 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 Phatra Leasing and Central Plaza into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Phatra Leasing Public and Central Plaza Hotel, you can compare the effects of market volatilities on Phatra Leasing and Central Plaza 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 Phatra Leasing with a short position of Central Plaza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phatra Leasing and Central Plaza.

Diversification Opportunities for Phatra Leasing and Central Plaza

0.58

Correlation Coefficient

Phatra Leasing  Central Plaza

Very weak diversification

The 3 months correlation between Phatra and Central is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Phatra Leasing Public and Central Plaza Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Plaza Hotel and Phatra Leasing 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 Phatra Leasing Public are associated (or correlated) with Central Plaza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Plaza Hotel has no effect on the direction of Phatra Leasing i.e., Phatra Leasing and Central Plaza go up and down completely randomly.

Pair Corralation between Phatra Leasing and Central Plaza

Assuming the 90 days horizon Phatra Leasing Public is expected to generate 0.43 times more return on investment than Central Plaza. However, Phatra Leasing Public is 2.32 times less risky than Central Plaza. It trades about -0.27 of its potential returns per unit of risk. Central Plaza Hotel is currently generating about -0.22 per unit of risk. If you would invest  179.00  in Phatra Leasing Public on October 20, 2024 and sell it today you would lose (34.00) from holding Phatra Leasing Public or give up 18.99% of portfolio value over 90 days.

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

Phatra Leasing Public  vs.  Central Plaza Hotel

Phatra Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phatra Leasing 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 drivers remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Central Plaza Hotel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Central Plaza Hotel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Phatra Leasing and Central Plaza

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

The idea behind Phatra Leasing Public and Central Plaza Hotel 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.