Correlation Between Lalin Property and LPN Development
Can any of the company-specific risk be diversified away by investing in both Lalin Property and LPN Development 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 LPN Development 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 LPN Development Public, you can compare the effects of market volatilities on Lalin Property and LPN Development 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 LPN Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lalin Property and LPN Development.
Diversification Opportunities for Lalin Property and LPN Development
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lalin and LPN is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lalin Property Public and LPN Development Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPN Development Public 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 LPN Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPN Development Public has no effect on the direction of Lalin Property i.e., Lalin Property and LPN Development go up and down completely randomly.
Pair Corralation between Lalin Property and LPN Development
Assuming the 90 days trading horizon Lalin Property Public is expected to under-perform the LPN Development. In addition to that, Lalin Property is 1.5 times more volatile than LPN Development Public. It trades about -0.05 of its total potential returns per unit of risk. LPN Development Public is currently generating about 0.0 per unit of volatility. If you would invest 284.00 in LPN Development Public on September 13, 2024 and sell it today you would earn a total of 0.00 from holding LPN Development Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lalin Property Public vs. LPN Development Public
Performance |
| Timeline |
| Lalin Property Public |
| LPN Development Public |
Lalin Property and LPN Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lalin Property and LPN Development
The main advantage of trading using opposite Lalin Property and LPN Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lalin Property position performs unexpectedly, LPN Development 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 LPN Development will offset losses from the drop in LPN Development's long position.| Lalin Property vs. Wave Entertainment Public | Lalin Property vs. Vibhavadi Medical Center | Lalin Property vs. VGI Public | Lalin Property vs. WHA Public |
| LPN Development vs. Wave Entertainment Public | LPN Development vs. Vibhavadi Medical Center | LPN Development vs. VGI Public | LPN Development vs. WHA 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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