Correlation Between Arinsiri Land and Singha Estate

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

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

Diversification Opportunities for Arinsiri Land and Singha Estate

0.52

Correlation Coefficient

Arinsiri Land  Singha Estate

Very weak diversification

The 3 months correlation between Arinsiri and Singha is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Arinsiri Land Public and Singha Estate Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singha Estate Public and Arinsiri Land 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 Arinsiri Land Public are associated (or correlated) with Singha Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singha Estate Public has no effect on the direction of Arinsiri Land i.e., Arinsiri Land and Singha Estate go up and down completely randomly.

Pair Corralation between Arinsiri Land and Singha Estate

Assuming the 90 days trading horizon Arinsiri Land Public is expected to under-perform the Singha Estate. But the stock apears to be less risky and, when comparing its historical volatility, Arinsiri Land Public is 25.51 times less risky than Singha Estate. The stock trades about -0.19 of its potential returns per unit of risk. The Singha Estate Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  131.00  in Singha Estate Public on September 26, 2024 and sell it today you would lose (40.00) from holding Singha Estate Public or give up 30.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Arinsiri Land Public  vs.  Singha Estate Public

Arinsiri Land Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arinsiri Land 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 forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Singha Estate Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Singha Estate Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Singha Estate disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arinsiri Land and Singha Estate

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

The idea behind Arinsiri Land Public and Singha Estate 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.