Correlation Between Lohakit Metal and CHUWIT FARM
Can any of the company-specific risk be diversified away by investing in both Lohakit Metal and CHUWIT FARM 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 CHUWIT FARM 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 CHUWIT FARM PUBLIC, you can compare the effects of market volatilities on Lohakit Metal and CHUWIT FARM 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 CHUWIT FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohakit Metal and CHUWIT FARM.
Diversification Opportunities for Lohakit Metal and CHUWIT FARM
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lohakit and CHUWIT is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lohakit Metal Public and CHUWIT FARM PUBLIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHUWIT FARM 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 CHUWIT FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHUWIT FARM PUBLIC has no effect on the direction of Lohakit Metal i.e., Lohakit Metal and CHUWIT FARM go up and down completely randomly.
Pair Corralation between Lohakit Metal and CHUWIT FARM
Assuming the 90 days trading horizon Lohakit Metal Public is expected to generate 0.27 times more return on investment than CHUWIT FARM. However, Lohakit Metal Public is 3.76 times less risky than CHUWIT FARM. It trades about -0.02 of its potential returns per unit of risk. CHUWIT FARM PUBLIC is currently generating about -0.06 per unit of risk. If you would invest 391.00 in Lohakit Metal Public on August 31, 2024 and sell it today you would lose (15.00) from holding Lohakit Metal Public or give up 3.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.37% |
| Values | Daily Returns |
Lohakit Metal Public vs. CHUWIT FARM PUBLIC
Performance |
| Timeline |
| Lohakit Metal Public |
| CHUWIT FARM PUBLIC |
Lohakit Metal and CHUWIT FARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lohakit Metal and CHUWIT FARM
The main advantage of trading using opposite Lohakit Metal and CHUWIT FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohakit Metal position performs unexpectedly, CHUWIT FARM 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 CHUWIT FARM will offset losses from the drop in CHUWIT FARM's long position.| Lohakit Metal vs. Gulf Energy Development | Lohakit Metal vs. Energy Absolute Public | Lohakit Metal vs. WHA Public | Lohakit Metal vs. TRC Construction Public |
| CHUWIT FARM vs. AP Public | CHUWIT FARM vs. TRC Construction Public | CHUWIT FARM vs. Bangkok Expressway and | CHUWIT FARM vs. Lohakit Metal 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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