Correlation Between Golden Ventures and Thailand Prime

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

By analyzing existing cross correlation between Golden Ventures Leasehold and Thailand Prime Property, you can compare the effects of market volatilities on Golden Ventures and Thailand Prime 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 Golden Ventures with a short position of Thailand Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ventures and Thailand Prime.

Diversification Opportunities for Golden Ventures and Thailand Prime

0.2

Correlation Coefficient

Golden Ventures  Thailand Prime

Modest diversification

The 3 months correlation between Golden and Thailand is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ventures Leasehold and Thailand Prime Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thailand Prime Property and Golden Ventures 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 Golden Ventures Leasehold are associated (or correlated) with Thailand Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thailand Prime Property has no effect on the direction of Golden Ventures i.e., Golden Ventures and Thailand Prime go up and down completely randomly.

Pair Corralation between Golden Ventures and Thailand Prime

Assuming the 90 days trading horizon Golden Ventures Leasehold is expected to under-perform the Thailand Prime. But the stock apears to be less risky and, when comparing its historical volatility, Golden Ventures Leasehold is 1.4 times less risky than Thailand Prime. The stock trades about 0.0 of its potential returns per unit of risk. The Thailand Prime Property is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  751.00  in Thailand Prime Property on September 26, 2024 and sell it today you would lose (1.00) from holding Thailand Prime Property or give up 0.13% of portfolio value over 90 days.

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

Golden Ventures Leasehold  vs.  Thailand Prime Property

Golden Ventures Leasehold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Ventures Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Golden Ventures is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thailand Prime Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thailand Prime Property has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Thailand Prime is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Golden Ventures and Thailand Prime

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

The idea behind Golden Ventures Leasehold and Thailand Prime Property 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.