Correlation Between Lalin Property and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Lalin Property and Dow Jones 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 Lalin Property and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lalin Property Public and Dow Jones Industrial, you can compare the effects of market volatilities on Lalin Property and Dow Jones 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 Lalin Property with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lalin Property and Dow Jones.
Diversification Opportunities for Lalin Property and Dow Jones
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lalin and Dow is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lalin Property Public and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Lalin Property 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 Lalin Property Public are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Lalin Property i.e., Lalin Property and Dow Jones go up and down completely randomly.
Pair Corralation between Lalin Property and Dow Jones
Assuming the 90 days trading horizon Lalin Property Public is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, Lalin Property Public is 1.01 times less risky than Dow Jones. The stock trades about -0.06 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,347,646 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 1,124,560 from holding Dow Jones Industrial or generate 33.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.17% |
| Values | Daily Returns |
Lalin Property Public vs. Dow Jones Industrial
Performance |
| Timeline |
Lalin Property and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Lalin Property Public
Pair trading matchups for Lalin Property
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Lalin Property and Dow Jones
The main advantage of trading using opposite Lalin Property and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lalin Property position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Lalin Property vs. AP Public | Lalin Property vs. Land and Houses | Lalin Property vs. LPN Development Public | Lalin Property vs. Supalai Public |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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