Correlation Between Lohakit Metal and Stock Exchange
Can any of the company-specific risk be diversified away by investing in both Lohakit Metal and Stock Exchange 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 Stock Exchange 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 Stock Exchange Of, you can compare the effects of market volatilities on Lohakit Metal and Stock Exchange 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 Stock Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohakit Metal and Stock Exchange.
Diversification Opportunities for Lohakit Metal and Stock Exchange
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lohakit and Stock is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lohakit Metal Public and Stock Exchange Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Exchange 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 Stock Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Exchange has no effect on the direction of Lohakit Metal i.e., Lohakit Metal and Stock Exchange go up and down completely randomly.
Pair Corralation between Lohakit Metal and Stock Exchange
Assuming the 90 days trading horizon Lohakit Metal Public is expected to under-perform the Stock Exchange. In addition to that, Lohakit Metal is 1.14 times more volatile than Stock Exchange Of. It trades about -0.13 of its total potential returns per unit of risk. Stock Exchange Of is currently generating about -0.04 per unit of volatility. If you would invest 144,883 in Stock Exchange Of on August 30, 2024 and sell it today you would lose (1,843) from holding Stock Exchange Of or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lohakit Metal Public vs. Stock Exchange Of
Performance |
| Timeline |
Lohakit Metal and Stock Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Lohakit Metal Public
Pair trading matchups for Lohakit Metal
Stock Exchange Of
Pair trading matchups for Stock Exchange
Pair Trading with Lohakit Metal and Stock Exchange
The main advantage of trading using opposite Lohakit Metal and Stock Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohakit Metal position performs unexpectedly, Stock Exchange 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 Stock Exchange will offset losses from the drop in Stock Exchange's long position.| Lohakit Metal vs. MCS Steel Public | Lohakit Metal vs. Asia Plus Group | Lohakit Metal vs. Lalin Property Public | Lohakit Metal vs. Lam Soon Public |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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