Correlation Between LPN Development and Ocean Glass
Can any of the company-specific risk be diversified away by investing in both LPN Development and Ocean Glass 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 Ocean Glass 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 Ocean Glass Public, you can compare the effects of market volatilities on LPN Development and Ocean Glass 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 Ocean Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPN Development and Ocean Glass.
Diversification Opportunities for LPN Development and Ocean Glass
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LPN and Ocean is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding LPN Development Public and Ocean Glass Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Glass 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 Ocean Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Glass Public has no effect on the direction of LPN Development i.e., LPN Development and Ocean Glass go up and down completely randomly.
Pair Corralation between LPN Development and Ocean Glass
Assuming the 90 days trading horizon LPN Development is expected to generate 1.03 times less return on investment than Ocean Glass. But when comparing it to its historical volatility, LPN Development Public is 1.0 times less risky than Ocean Glass. It trades about 0.04 of its potential returns per unit of risk. Ocean Glass Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,355 in Ocean Glass Public on September 3, 2024 and sell it today you would lose (455.00) from holding Ocean Glass Public or give up 19.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
LPN Development Public vs. Ocean Glass Public
Performance |
| Timeline |
| LPN Development Public |
| Ocean Glass Public |
LPN Development and Ocean Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPN Development and Ocean Glass
The main advantage of trading using opposite LPN Development and Ocean Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPN Development position performs unexpectedly, Ocean Glass 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 Ocean Glass will offset losses from the drop in Ocean Glass' long position.| LPN Development vs. Land and Houses | LPN Development vs. Quality Houses Public | LPN Development vs. AP Public | LPN Development vs. SCB X Public |
| Ocean Glass vs. Peoples Garment Public | Ocean Glass vs. LPN Development Public | Ocean Glass vs. Nawarat Patanakarn Public | Ocean Glass vs. President Bakery 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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