Correlation Between LH Financial and Siam Commercial
Can any of the company-specific risk be diversified away by investing in both LH Financial and Siam Commercial 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 Siam Commercial 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 The Siam Commercial, you can compare the effects of market volatilities on LH Financial and Siam Commercial 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 Siam Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LH Financial and Siam Commercial.
Diversification Opportunities for LH Financial and Siam Commercial
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LHFG and Siam is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding LH Financial Group and The Siam Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Commercial 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 Siam Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Commercial has no effect on the direction of LH Financial i.e., LH Financial and Siam Commercial go up and down completely randomly.
Pair Corralation between LH Financial and Siam Commercial
Assuming the 90 days trading horizon LH Financial is expected to generate 4.44 times less return on investment than Siam Commercial. In addition to that, LH Financial is 1.32 times more volatile than The Siam Commercial. It trades about 0.05 of its total potential returns per unit of risk. The Siam Commercial is currently generating about 0.29 per unit of volatility. If you would invest 11,762 in The Siam Commercial on November 2, 2024 and sell it today you would earn a total of 788.00 from holding The Siam Commercial or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LH Financial Group vs. The Siam Commercial
Performance |
| Timeline |
| LH Financial Group |
| Siam Commercial |
LH Financial and Siam Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LH Financial and Siam Commercial
The main advantage of trading using opposite LH Financial and Siam Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LH Financial position performs unexpectedly, Siam Commercial 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 Siam Commercial will offset losses from the drop in Siam Commercial's long position.| LH Financial vs. Quality Houses Public | LH Financial vs. Kiatnakin Phatra Bank | LH Financial vs. Land and Houses | LH Financial vs. TISCO Financial Group |
| Siam Commercial vs. The Siam Cement | Siam Commercial vs. Krung Thai Bank | Siam Commercial vs. Airports of Thailand | Siam Commercial vs. Kasikornbank 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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