Correlation Between Prime Lands and Asian Hotels

Can any of the company-specific risk be diversified away by investing in both Prime Lands and Asian Hotels 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 Prime Lands and Asian Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prime Lands Residencies and Asian Hotels and, you can compare the effects of market volatilities on Prime Lands and Asian Hotels 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 Prime Lands with a short position of Asian Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Lands and Asian Hotels.

Diversification Opportunities for Prime Lands and Asian Hotels

0.48

Correlation Coefficient

Prime Lands  Asian Hotels

Very weak diversification

The 3 months correlation between Prime and Asian is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Prime Lands Residencies and Asian Hotels and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Hotels and Prime Lands 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 Prime Lands Residencies are associated (or correlated) with Asian Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Hotels has no effect on the direction of Prime Lands i.e., Prime Lands and Asian Hotels go up and down completely randomly.

Pair Corralation between Prime Lands and Asian Hotels

Assuming the 90 days trading horizon Prime Lands Residencies is expected to generate 1.01 times more return on investment than Asian Hotels. However, Prime Lands is 1.01 times more volatile than Asian Hotels and. It trades about 0.04 of its potential returns per unit of risk. Asian Hotels and is currently generating about 0.04 per unit of risk. If you would invest  810.00  in Prime Lands Residencies on December 4, 2024 and sell it today you would earn a total of  340.00  from holding Prime Lands Residencies or generate 41.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.82%
Values	Daily Returns

Prime Lands Residencies  vs.  Asian Hotels and

Prime Lands Residencies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Prime Lands Residencies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Prime Lands may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Asian Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asian Hotels and 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 basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Prime Lands and Asian Hotels

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

The idea behind Prime Lands Residencies and Asian Hotels and 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.