Correlation Between LPN Development and Muangthai Capital
Can any of the company-specific risk be diversified away by investing in both LPN Development and Muangthai Capital 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 LPN Development and Muangthai Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPN Development Public and Muangthai Capital Public, you can compare the effects of market volatilities on LPN Development and Muangthai Capital 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 LPN Development with a short position of Muangthai Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPN Development and Muangthai Capital.
Diversification Opportunities for LPN Development and Muangthai Capital
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LPN and Muangthai is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding LPN Development Public and Muangthai Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muangthai Capital Public and LPN Development 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 LPN Development Public are associated (or correlated) with Muangthai Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muangthai Capital Public has no effect on the direction of LPN Development i.e., LPN Development and Muangthai Capital go up and down completely randomly.
Pair Corralation between LPN Development and Muangthai Capital
Assuming the 90 days trading horizon LPN Development is expected to generate 1.09 times less return on investment than Muangthai Capital. But when comparing it to its historical volatility, LPN Development Public is 1.0 times less risky than Muangthai Capital. It trades about 0.04 of its potential returns per unit of risk. Muangthai Capital Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,776 in Muangthai Capital Public on September 5, 2024 and sell it today you would earn a total of 1,249 from holding Muangthai Capital Public or generate 33.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPN Development Public vs. Muangthai Capital Public
Performance |
| Timeline |
| LPN Development Public |
| Muangthai Capital Public |
LPN Development and Muangthai Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPN Development and Muangthai Capital
The main advantage of trading using opposite LPN Development and Muangthai Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPN Development position performs unexpectedly, Muangthai Capital 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 Muangthai Capital will offset losses from the drop in Muangthai Capital's long position.The idea behind LPN Development Public and Muangthai Capital Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Muangthai Capital vs. Multibax Public | Muangthai Capital vs. Forth Smart Service | Muangthai Capital vs. LPN Development Public | Muangthai Capital vs. Jasmine International 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |