Correlation Between Singha Estate and Quality Houses

Can any of the company-specific risk be diversified away by investing in both Singha Estate and Quality Houses 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 Singha Estate and Quality Houses into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Singha Estate Public and Quality Houses Public, you can compare the effects of market volatilities on Singha Estate and Quality Houses 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 Singha Estate with a short position of Quality Houses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singha Estate and Quality Houses.

Diversification Opportunities for Singha Estate and Quality Houses

0.6

Correlation Coefficient

Singha Estate  Quality Houses

Poor diversification

The 3 months correlation between Singha and Quality is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Singha Estate Public and Quality Houses Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quality Houses Public and Singha Estate 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 Singha Estate Public are associated (or correlated) with Quality Houses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quality Houses Public has no effect on the direction of Singha Estate i.e., Singha Estate and Quality Houses go up and down completely randomly.

Pair Corralation between Singha Estate and Quality Houses

Given the investment horizon of 90 days Singha Estate Public is expected to under-perform the Quality Houses. In addition to that, Singha Estate is 2.1 times more volatile than Quality Houses Public. It trades about -0.19 of its total potential returns per unit of risk. Quality Houses Public is currently generating about -0.14 per unit of volatility. If you would invest  172.00  in Quality Houses Public on December 29, 2024 and sell it today you would lose (16.00) from holding Quality Houses Public or give up 9.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Singha Estate Public  vs.  Quality Houses Public

Singha Estate Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Singha Estate 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Quality Houses Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quality Houses Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Singha Estate and Quality Houses

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

The idea behind Singha Estate Public and Quality Houses Public 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.