Correlation Between JCK Hospitality and Dhouse Pattana

Can any of the company-specific risk be diversified away by investing in both JCK Hospitality and Dhouse Pattana 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 JCK Hospitality and Dhouse Pattana into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for JCK Hospitality and Dhouse Pattana

0.08

Correlation Coefficient

JCK Hospitality  Dhouse Pattana

Significant diversification

The 3 months correlation between JCK and Dhouse is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding JCK Hospitality Public and Dhouse Pattana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dhouse Pattana Public and JCK Hospitality 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 JCK Hospitality Public are associated (or correlated) with Dhouse Pattana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dhouse Pattana Public has no effect on the direction of JCK Hospitality i.e., JCK Hospitality and Dhouse Pattana go up and down completely randomly.

Pair Corralation between JCK Hospitality and Dhouse Pattana

Assuming the 90 days trading horizon JCK Hospitality Public is expected to generate 10.68 times more return on investment than Dhouse Pattana. However, JCK Hospitality is 10.68 times more volatile than Dhouse Pattana Public. It trades about 0.13 of its potential returns per unit of risk. Dhouse Pattana Public is currently generating about 0.01 per unit of risk. If you would invest  2.00  in JCK Hospitality Public on September 24, 2024 and sell it today you would earn a total of  1.00  from holding JCK Hospitality Public or generate 50.0% return on investment over 90 days.

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

JCK Hospitality Public  vs.  Dhouse Pattana Public

JCK Hospitality Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JCK Hospitality Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, JCK Hospitality disclosed solid returns over the last few months and may actually be approaching a breakup point.

Dhouse Pattana Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with JCK Hospitality and Dhouse Pattana

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

The idea behind JCK Hospitality Public and Dhouse Pattana 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..