Correlation Between St Joe and Lai Sun
Can any of the company-specific risk be diversified away by investing in both St Joe and Lai Sun 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 St Joe and Lai Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Joe Company and Lai Sun Garment, you can compare the effects of market volatilities on St Joe and Lai Sun 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 St Joe with a short position of Lai Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Joe and Lai Sun.
Diversification Opportunities for St Joe and Lai Sun
Excellent diversification
The 3 months correlation between JOE and Lai is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding St Joe Company and Lai Sun Garment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lai Sun Garment and St Joe 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 St Joe Company are associated (or correlated) with Lai Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lai Sun Garment has no effect on the direction of St Joe i.e., St Joe and Lai Sun go up and down completely randomly.
Pair Corralation between St Joe and Lai Sun
Considering the 90-day investment horizon St Joe Company is expected to under-perform the Lai Sun. But the stock apears to be less risky and, when comparing its historical volatility, St Joe Company is 1.3 times less risky than Lai Sun. The stock trades about -0.02 of its potential returns per unit of risk. The Lai Sun Garment is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Lai Sun Garment on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Lai Sun Garment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
St Joe Company vs. Lai Sun Garment
Performance |
| Timeline |
| St Joe Company |
| Lai Sun Garment |
St Joe and Lai Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Joe and Lai Sun
The main advantage of trading using opposite St Joe and Lai Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Joe position performs unexpectedly, Lai Sun 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 Lai Sun will offset losses from the drop in Lai Sun's long position.| St Joe vs. Stratus Properties | St Joe vs. Mitsui Fudosan Co | St Joe vs. New World Development | St Joe vs. Comstock Holding Companies |
| Lai Sun vs. IPG Photonics | Lai Sun vs. Supercom | Lai Sun vs. FormFactor | Lai Sun vs. Playtika Holding Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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