Correlation Between LPI Capital and Dagang Nexchange
Can any of the company-specific risk be diversified away by investing in both LPI Capital and Dagang Nexchange 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 LPI Capital and Dagang Nexchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPI Capital Bhd and Dagang Nexchange Bhd, you can compare the effects of market volatilities on LPI Capital and Dagang Nexchange 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 LPI Capital with a short position of Dagang Nexchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPI Capital and Dagang Nexchange.
Diversification Opportunities for LPI Capital and Dagang Nexchange
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPI and Dagang is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding LPI Capital Bhd and Dagang Nexchange Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dagang Nexchange Bhd and LPI Capital 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 LPI Capital Bhd are associated (or correlated) with Dagang Nexchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dagang Nexchange Bhd has no effect on the direction of LPI Capital i.e., LPI Capital and Dagang Nexchange go up and down completely randomly.
Pair Corralation between LPI Capital and Dagang Nexchange
Assuming the 90 days trading horizon LPI Capital Bhd is expected to under-perform the Dagang Nexchange. But the stock apears to be less risky and, when comparing its historical volatility, LPI Capital Bhd is 3.5 times less risky than Dagang Nexchange. The stock trades about -0.1 of its potential returns per unit of risk. The Dagang Nexchange Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Dagang Nexchange Bhd on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Dagang Nexchange Bhd or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPI Capital Bhd vs. Dagang Nexchange Bhd
Performance |
| Timeline |
| LPI Capital Bhd |
| Dagang Nexchange Bhd |
LPI Capital and Dagang Nexchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPI Capital and Dagang Nexchange
The main advantage of trading using opposite LPI Capital and Dagang Nexchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPI Capital position performs unexpectedly, Dagang Nexchange 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 Dagang Nexchange will offset losses from the drop in Dagang Nexchange's long position.| LPI Capital vs. Petronas Chemicals Group | LPI Capital vs. IHH Healthcare Bhd | LPI Capital vs. Al Aqar Healthcare | LPI Capital vs. Cosmos Technology International |
| Dagang Nexchange vs. Aeon Credit Service | Dagang Nexchange vs. Alliance Financial Group | Dagang Nexchange vs. Southern Steel Bhd | Dagang Nexchange vs. Star Media Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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