Correlation Between Lohakit Metal and Asia Hotel
Can any of the company-specific risk be diversified away by investing in both Lohakit Metal and Asia Hotel 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 Asia Hotel 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 Asia Hotel Public, you can compare the effects of market volatilities on Lohakit Metal and Asia Hotel 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 Asia Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohakit Metal and Asia Hotel.
Diversification Opportunities for Lohakit Metal and Asia Hotel
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lohakit and Asia is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lohakit Metal Public and Asia Hotel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Hotel 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 Asia Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Hotel Public has no effect on the direction of Lohakit Metal i.e., Lohakit Metal and Asia Hotel go up and down completely randomly.
Pair Corralation between Lohakit Metal and Asia Hotel
Assuming the 90 days trading horizon Lohakit Metal is expected to generate 370.93 times less return on investment than Asia Hotel. But when comparing it to its historical volatility, Lohakit Metal Public is 209.71 times less risky than Asia Hotel. It trades about 0.09 of its potential returns per unit of risk. Asia Hotel Public is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 645.00 in Asia Hotel Public on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Asia Hotel Public or generate 2.33% 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. Asia Hotel Public
Performance |
| Timeline |
| Lohakit Metal Public |
| Asia Hotel Public |
Lohakit Metal and Asia Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lohakit Metal and Asia Hotel
The main advantage of trading using opposite Lohakit Metal and Asia Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohakit Metal position performs unexpectedly, Asia Hotel 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 Asia Hotel will offset losses from the drop in Asia Hotel'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 |
| Asia Hotel vs. TRC Construction Public | Asia Hotel vs. Bangkok Expressway and | Asia Hotel vs. Lohakit Metal Public | Asia Hotel vs. Gunkul Engineering 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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