Correlation Between Lalin Property and Sahamit Machinery
Can any of the company-specific risk be diversified away by investing in both Lalin Property and Sahamit Machinery 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 Sahamit Machinery 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 Sahamit Machinery Public, you can compare the effects of market volatilities on Lalin Property and Sahamit Machinery 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 Sahamit Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lalin Property and Sahamit Machinery.
Diversification Opportunities for Lalin Property and Sahamit Machinery
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lalin and Sahamit is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lalin Property Public and Sahamit Machinery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sahamit Machinery 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 Sahamit Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sahamit Machinery Public has no effect on the direction of Lalin Property i.e., Lalin Property and Sahamit Machinery go up and down completely randomly.
Pair Corralation between Lalin Property and Sahamit Machinery
Assuming the 90 days trading horizon Lalin Property Public is expected to under-perform the Sahamit Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Lalin Property Public is 85.43 times less risky than Sahamit Machinery. The stock trades about -0.1 of its potential returns per unit of risk. The Sahamit Machinery Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 428.00 in Sahamit Machinery Public on September 1, 2024 and sell it today you would lose (22.00) from holding Sahamit Machinery Public or give up 5.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lalin Property Public vs. Sahamit Machinery Public
Performance |
| Timeline |
| Lalin Property Public |
| Sahamit Machinery Public |
Lalin Property and Sahamit Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lalin Property and Sahamit Machinery
The main advantage of trading using opposite Lalin Property and Sahamit Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lalin Property position performs unexpectedly, Sahamit Machinery 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 Sahamit Machinery will offset losses from the drop in Sahamit Machinery'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 |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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