Correlation Between Lalin Property and Noble Development
Can any of the company-specific risk be diversified away by investing in both Lalin Property and Noble 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 Noble 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 Noble Development Public, you can compare the effects of market volatilities on Lalin Property and Noble 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 Noble Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lalin Property and Noble Development.
Diversification Opportunities for Lalin Property and Noble Development
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lalin and Noble is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lalin Property Public and Noble Development Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble 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 Noble Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Development Public has no effect on the direction of Lalin Property i.e., Lalin Property and Noble Development go up and down completely randomly.
Pair Corralation between Lalin Property and Noble Development
Assuming the 90 days trading horizon Lalin Property Public is expected to under-perform the Noble Development. But the stock apears to be less risky and, when comparing its historical volatility, Lalin Property Public is 1.66 times less risky than Noble Development. The stock trades about -0.33 of its potential returns per unit of risk. The Noble Development Public is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 214.00 in Noble Development Public on December 4, 2024 and sell it today you would lose (8.00) from holding Noble Development Public or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lalin Property Public vs. Noble Development Public
Performance |
| Timeline |
| Lalin Property Public |
| Noble Development Public |
Lalin Property and Noble Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lalin Property and Noble Development
The main advantage of trading using opposite Lalin Property and Noble Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lalin Property position performs unexpectedly, Noble 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 Noble Development will offset losses from the drop in Noble Development'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 |
| Noble Development vs. Land and Houses | Noble Development vs. AP Public | Noble Development vs. Lalin Property Public | Noble Development vs. Quality Houses 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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