Correlation Between ALL ENERGY and Lotus Retail
Can any of the company-specific risk be diversified away by investing in both ALL ENERGY and Lotus Retail 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 Lotus Retail 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 Lotus Retail Growth, you can compare the effects of market volatilities on ALL ENERGY and Lotus Retail 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 Lotus Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALL ENERGY and Lotus Retail.
Diversification Opportunities for ALL ENERGY and Lotus Retail
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ALL and Lotus is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ALL ENERGY UTILITIES and Lotus Retail Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Retail Growth 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 Lotus Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Retail Growth has no effect on the direction of ALL ENERGY i.e., ALL ENERGY and Lotus Retail go up and down completely randomly.
Pair Corralation between ALL ENERGY and Lotus Retail
Assuming the 90 days horizon ALL ENERGY UTILITIES is expected to under-perform the Lotus Retail. In addition to that, ALL ENERGY is 2.85 times more volatile than Lotus Retail Growth. It trades about -0.07 of its total potential returns per unit of risk. Lotus Retail Growth is currently generating about 0.03 per unit of volatility. If you would invest 1,095 in Lotus Retail Growth on August 31, 2024 and sell it today you would earn a total of 175.00 from holding Lotus Retail Growth or generate 15.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.13% |
| Values | Daily Returns |
ALL ENERGY UTILITIES vs. Lotus Retail Growth
Performance |
| Timeline |
| ALL ENERGY UTILITIES |
| Lotus Retail Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ALL ENERGY and Lotus Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALL ENERGY and Lotus Retail
The main advantage of trading using opposite ALL ENERGY and Lotus Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALL ENERGY position performs unexpectedly, Lotus Retail 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 Lotus Retail will offset losses from the drop in Lotus Retail'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 |
| Lotus Retail vs. CPN Retail Growth | Lotus Retail vs. Ticon Freehold and | Lotus Retail vs. WHA Premium Growth | Lotus Retail vs. Major Cineplex Lifestyle |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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