Correlation Between ALL ENERGY and Lohakit Metal
Can any of the company-specific risk be diversified away by investing in both ALL ENERGY and Lohakit Metal 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 ALL ENERGY and Lohakit Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALL ENERGY UTILITIES and Lohakit Metal Public, you can compare the effects of market volatilities on ALL ENERGY and Lohakit Metal 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 ALL ENERGY with a short position of Lohakit Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALL ENERGY and Lohakit Metal.
Diversification Opportunities for ALL ENERGY and Lohakit Metal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ALL and Lohakit is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ALL ENERGY UTILITIES and Lohakit Metal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lohakit Metal Public and ALL ENERGY 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 ALL ENERGY UTILITIES are associated (or correlated) with Lohakit Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lohakit Metal Public has no effect on the direction of ALL ENERGY i.e., ALL ENERGY and Lohakit Metal go up and down completely randomly.
Pair Corralation between ALL ENERGY and Lohakit Metal
Assuming the 90 days horizon ALL ENERGY UTILITIES is expected to generate 5.88 times more return on investment than Lohakit Metal. However, ALL ENERGY is 5.88 times more volatile than Lohakit Metal Public. It trades about 0.06 of its potential returns per unit of risk. Lohakit Metal Public is currently generating about 0.09 per unit of risk. If you would invest 18.00 in ALL ENERGY UTILITIES on September 2, 2024 and sell it today you would earn a total of 2.00 from holding ALL ENERGY UTILITIES or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALL ENERGY UTILITIES vs. Lohakit Metal Public
Performance |
| Timeline |
| ALL ENERGY UTILITIES |
| Lohakit Metal Public |
ALL ENERGY and Lohakit Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALL ENERGY and Lohakit Metal
The main advantage of trading using opposite ALL ENERGY and Lohakit Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALL ENERGY position performs unexpectedly, Lohakit Metal 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 Lohakit Metal will offset losses from the drop in Lohakit Metal's long position.| ALL ENERGY vs. AP Public | ALL ENERGY vs. TRC Construction Public | ALL ENERGY vs. Bangkok Expressway and | ALL ENERGY vs. Lohakit Metal Public |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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