Correlation Between LH Financial and North East
Can any of the company-specific risk be diversified away by investing in both LH Financial and North East 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 LH Financial and North East into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LH Financial Group and North East Rubbers, you can compare the effects of market volatilities on LH Financial and North East 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 LH Financial with a short position of North East. Check out your portfolio center. Please also check ongoing floating volatility patterns of LH Financial and North East.
Diversification Opportunities for LH Financial and North East
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between LHFG and North is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding LH Financial Group and North East Rubbers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North East Rubbers and LH Financial 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 LH Financial Group are associated (or correlated) with North East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North East Rubbers has no effect on the direction of LH Financial i.e., LH Financial and North East go up and down completely randomly.
Pair Corralation between LH Financial and North East
Assuming the 90 days trading horizon LH Financial Group is expected to under-perform the North East. In addition to that, LH Financial is 1.82 times more volatile than North East Rubbers. It trades about -0.15 of its total potential returns per unit of risk. North East Rubbers is currently generating about -0.16 per unit of volatility. If you would invest 496.00 in North East Rubbers on August 29, 2024 and sell it today you would lose (18.00) from holding North East Rubbers or give up 3.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
LH Financial Group vs. North East Rubbers
Performance |
| Timeline |
| LH Financial Group |
| North East Rubbers |
LH Financial and North East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LH Financial and North East
The main advantage of trading using opposite LH Financial and North East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LH Financial position performs unexpectedly, North East 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 North East will offset losses from the drop in North East's long position.| LH Financial vs. PTT Public | LH Financial vs. The Siam Commercial | LH Financial vs. CP ALL Public | LH Financial vs. SCB X Public |
| North East vs. Sri Trang Agro Industry | North East vs. Jay Mart Public | North East vs. Com7 PCL | North East vs. Energy Absolute 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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