Correlation Between Lalin Property and NC Housing
Can any of the company-specific risk be diversified away by investing in both Lalin Property and NC Housing 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 NC Housing 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 NC Housing Public, you can compare the effects of market volatilities on Lalin Property and NC Housing 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 NC Housing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lalin Property and NC Housing.
Diversification Opportunities for Lalin Property and NC Housing
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lalin and NCH is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lalin Property Public and NC Housing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NC Housing 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 NC Housing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NC Housing Public has no effect on the direction of Lalin Property i.e., Lalin Property and NC Housing go up and down completely randomly.
Pair Corralation between Lalin Property and NC Housing
Assuming the 90 days trading horizon Lalin Property Public is expected to under-perform the NC Housing. But the stock apears to be less risky and, when comparing its historical volatility, Lalin Property Public is 71.14 times less risky than NC Housing. The stock trades about -0.15 of its potential returns per unit of risk. The NC Housing Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 99.00 in NC Housing Public on December 4, 2024 and sell it today you would lose (33.00) from holding NC Housing Public or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.58% |
| Values | Daily Returns |
Lalin Property Public vs. NC Housing Public
Performance |
| Timeline |
| Lalin Property Public |
| NC Housing Public |
Lalin Property and NC Housing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lalin Property and NC Housing
The main advantage of trading using opposite Lalin Property and NC Housing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lalin Property position performs unexpectedly, NC Housing 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 NC Housing will offset losses from the drop in NC Housing's long position.| Lalin Property vs. AP Public | Lalin Property vs. Land and Houses | Lalin Property vs. LPN Development Public | Lalin Property vs. Supalai Public |
| NC Housing vs. AP Public | NC Housing vs. Property Perfect Public | NC Housing vs. LPN Development Public | NC Housing vs. Lalin Property 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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