Correlation Between Laguna Resorts and Minor International

Can any of the company-specific risk be diversified away by investing in both Laguna Resorts and Minor International 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 Laguna Resorts and Minor International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Laguna Resorts Hotels and Minor International Public, you can compare the effects of market volatilities on Laguna Resorts and Minor International 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 Laguna Resorts with a short position of Minor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laguna Resorts and Minor International.

Diversification Opportunities for Laguna Resorts and Minor International

-0.01

Correlation Coefficient

Laguna Resorts  Minor International

Good diversification

The 3 months correlation between Laguna and Minor is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Laguna Resorts Hotels and Minor International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minor International and Laguna Resorts 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 Laguna Resorts Hotels are associated (or correlated) with Minor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minor International has no effect on the direction of Laguna Resorts i.e., Laguna Resorts and Minor International go up and down completely randomly.

Pair Corralation between Laguna Resorts and Minor International

Assuming the 90 days trading horizon Laguna Resorts is expected to generate 453.32 times less return on investment than Minor International. But when comparing it to its historical volatility, Laguna Resorts Hotels is 125.21 times less risky than Minor International. It trades about 0.03 of its potential returns per unit of risk. Minor International Public is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,303  in Minor International Public on September 5, 2024 and sell it today you would lose (603.00) from holding Minor International Public or give up 18.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.13%
Values	Daily Returns

Laguna Resorts Hotels  vs.  Minor International Public

Laguna Resorts Hotels

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Laguna Resorts Hotels are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical indicators, Laguna Resorts is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Minor International

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Minor International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat conflicting basic indicators, Minor International sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Laguna Resorts and Minor International

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

The idea behind Laguna Resorts Hotels and Minor International 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.