Correlation Between Quality Houses and Thailand Prime

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

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

Diversification Opportunities for Quality Houses and Thailand Prime

-0.23

Correlation Coefficient

Quality Houses  Thailand Prime

Very good diversification

The 3 months correlation between Quality and Thailand is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Quality Houses Property 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 Quality Houses 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 Quality Houses Property 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 Quality Houses i.e., Quality Houses and Thailand Prime go up and down completely randomly.

Pair Corralation between Quality Houses and Thailand Prime

Assuming the 90 days trading horizon Quality Houses Property is expected to under-perform the Thailand Prime. But the fund apears to be less risky and, when comparing its historical volatility, Quality Houses Property is 2.12 times less risky than Thailand Prime. The fund trades about -0.13 of its potential returns per unit of risk. The Thailand Prime Property is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  726.00  in Thailand Prime Property on September 28, 2024 and sell it today you would earn a total of  24.00  from holding Thailand Prime Property or generate 3.31% return on investment over 90 days.

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

Quality Houses Property  vs.  Thailand Prime Property

Quality Houses Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quality Houses Property has generated negative risk-adjusted returns adding no value to fund investors. Despite latest conflicting performance, the Fund's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the fund institutional investors.

Thailand Prime Property

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thailand Prime Property are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 Quality Houses and Thailand Prime

The main advantage of trading using opposite Quality Houses and Thailand Prime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quality Houses 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 Quality Houses Property 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..