Correlation Between 2S Metal and LH Hotel
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By analyzing existing cross correlation between 2S Metal Public and LH Hotel Leasehold, you can compare the effects of market volatilities on 2S Metal and LH Hotel 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 2S Metal with a short position of LH Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and LH Hotel.
Diversification Opportunities for 2S Metal and LH Hotel
Modest diversification
The 3 months correlation between 2S Metal and LHHOTEL is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and LH Hotel Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LH Hotel Leasehold and 2S Metal 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 2S Metal Public are associated (or correlated) with LH Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LH Hotel Leasehold has no effect on the direction of 2S Metal i.e., 2S Metal and LH Hotel go up and down completely randomly.
Pair Corralation between 2S Metal and LH Hotel
Assuming the 90 days horizon 2S Metal Public is expected to under-perform the LH Hotel. But the stock apears to be less risky and, when comparing its historical volatility, 2S Metal Public is 1.11 times less risky than LH Hotel. The stock trades about -0.03 of its potential returns per unit of risk. The LH Hotel Leasehold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,124 in LH Hotel Leasehold on November 29, 2024 and sell it today you would earn a total of 216.00 from holding LH Hotel Leasehold or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
2S Metal Public vs. LH Hotel Leasehold
Performance |
| Timeline |
| 2S Metal Public |
| LH Hotel Leasehold |
2S Metal and LH Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2S Metal and LH Hotel
The main advantage of trading using opposite 2S Metal and LH Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, LH Hotel 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 LH Hotel will offset losses from the drop in LH Hotel's long position.| 2S Metal vs. Diamond Building Products | 2S Metal vs. MCS Steel Public | 2S Metal vs. Asia Green Energy | 2S Metal vs. Hwa Fong Rubber |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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