Correlation Between Charan Insurance and Lohakit Metal
Can any of the company-specific risk be diversified away by investing in both Charan Insurance 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 Charan Insurance and Lohakit Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charan Insurance Public and Lohakit Metal Public, you can compare the effects of market volatilities on Charan Insurance 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 Charan Insurance with a short position of Lohakit Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charan Insurance and Lohakit Metal.
Diversification Opportunities for Charan Insurance and Lohakit Metal
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Charan and Lohakit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Charan Insurance Public 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 Charan Insurance 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 Charan Insurance Public 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 Charan Insurance i.e., Charan Insurance and Lohakit Metal go up and down completely randomly.
Pair Corralation between Charan Insurance and Lohakit Metal
Assuming the 90 days trading horizon Charan Insurance Public is expected to generate 130.24 times more return on investment than Lohakit Metal. However, Charan Insurance is 130.24 times more volatile than Lohakit Metal Public. It trades about 0.1 of its potential returns per unit of risk. Lohakit Metal Public is currently generating about -0.03 per unit of risk. If you would invest 0.00 in Charan Insurance Public on November 2, 2024 and sell it today you would earn a total of 2,030 from holding Charan Insurance Public or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charan Insurance Public vs. Lohakit Metal Public
Performance |
| Timeline |
| Charan Insurance Public |
| Lohakit Metal Public |
Charan Insurance and Lohakit Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charan Insurance and Lohakit Metal
The main advantage of trading using opposite Charan Insurance and Lohakit Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charan Insurance 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.| Charan Insurance vs. Bhiraj Office Leasehold | Charan Insurance vs. Charoen Pokphand Foods | Charan Insurance vs. Exotic Food Public | Charan Insurance vs. Chiangmai Frozen Foods |
| Lohakit Metal vs. MCS Steel Public | Lohakit Metal vs. Asia Plus Group | Lohakit Metal vs. Lalin Property Public | Lohakit Metal vs. Lam Soon Public |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |