Correlation Between LH Shopping and Eastern Technical
Can any of the company-specific risk be diversified away by investing in both LH Shopping and Eastern Technical 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 Shopping and Eastern Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LH Shopping Centers and Eastern Technical Engineering, you can compare the effects of market volatilities on LH Shopping and Eastern Technical 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 Shopping with a short position of Eastern Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of LH Shopping and Eastern Technical.
Diversification Opportunities for LH Shopping and Eastern Technical
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LHSC and Eastern is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding LH Shopping Centers and Eastern Technical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Technical and LH Shopping 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 Shopping Centers are associated (or correlated) with Eastern Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Technical has no effect on the direction of LH Shopping i.e., LH Shopping and Eastern Technical go up and down completely randomly.
Pair Corralation between LH Shopping and Eastern Technical
Assuming the 90 days trading horizon LH Shopping Centers is expected to generate 0.27 times more return on investment than Eastern Technical. However, LH Shopping Centers is 3.65 times less risky than Eastern Technical. It trades about 0.14 of its potential returns per unit of risk. Eastern Technical Engineering is currently generating about 0.04 per unit of risk. If you would invest 1,130 in LH Shopping Centers on November 2, 2024 and sell it today you would earn a total of 20.00 from holding LH Shopping Centers or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LH Shopping Centers vs. Eastern Technical Engineering
Performance |
| Timeline |
| LH Shopping Centers |
| Eastern Technical |
LH Shopping and Eastern Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LH Shopping and Eastern Technical
The main advantage of trading using opposite LH Shopping and Eastern Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LH Shopping position performs unexpectedly, Eastern Technical 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 Eastern Technical will offset losses from the drop in Eastern Technical's long position.| LH Shopping vs. LH Hotel Leasehold | LH Shopping vs. Impact Growth REIT | LH Shopping vs. Quality Houses Property | LH Shopping vs. CPN Retail Growth |
| Eastern Technical vs. Srinanaporn Marketing Public | Eastern Technical vs. Thaifoods Group Public | Eastern Technical vs. GFPT Public | Eastern Technical vs. The Erawan Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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