Correlation Between Lohakit Metal and AJ Plast
Can any of the company-specific risk be diversified away by investing in both Lohakit Metal and AJ Plast 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 Lohakit Metal and AJ Plast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lohakit Metal Public and AJ Plast Public, you can compare the effects of market volatilities on Lohakit Metal and AJ Plast 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 Lohakit Metal with a short position of AJ Plast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohakit Metal and AJ Plast.
Diversification Opportunities for Lohakit Metal and AJ Plast
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lohakit and AJ Plast is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lohakit Metal Public and AJ Plast Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Plast Public and Lohakit Metal 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 Lohakit Metal Public are associated (or correlated) with AJ Plast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Plast Public has no effect on the direction of Lohakit Metal i.e., Lohakit Metal and AJ Plast go up and down completely randomly.
Pair Corralation between Lohakit Metal and AJ Plast
Assuming the 90 days trading horizon Lohakit Metal Public is expected to generate 0.61 times more return on investment than AJ Plast. However, Lohakit Metal Public is 1.65 times less risky than AJ Plast. It trades about 0.04 of its potential returns per unit of risk. AJ Plast Public is currently generating about -0.25 per unit of risk. If you would invest 374.00 in Lohakit Metal Public on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Lohakit Metal Public or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lohakit Metal Public vs. AJ Plast Public
Performance |
| Timeline |
| Lohakit Metal Public |
| AJ Plast Public |
Lohakit Metal and AJ Plast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lohakit Metal and AJ Plast
The main advantage of trading using opposite Lohakit Metal and AJ Plast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohakit Metal position performs unexpectedly, AJ Plast 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 AJ Plast will offset losses from the drop in AJ Plast's long position.| Lohakit Metal vs. Gulf Energy Development | Lohakit Metal vs. Energy Absolute Public | Lohakit Metal vs. WHA Public | Lohakit Metal vs. Bangkok Expressway and |
| AJ Plast vs. AAPICO Hitech Public | AJ Plast vs. AP Public | AJ Plast vs. Aikchol Hospital Public | AJ Plast vs. Bank of Ayudhya |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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