Correlation Between Lam Soon and Asia Aviation
Can any of the company-specific risk be diversified away by investing in both Lam Soon and Asia Aviation 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 Lam Soon and Asia Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lam Soon Public and Asia Aviation Public, you can compare the effects of market volatilities on Lam Soon and Asia Aviation 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 Lam Soon with a short position of Asia Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Soon and Asia Aviation.
Diversification Opportunities for Lam Soon and Asia Aviation
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lam and Asia is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lam Soon Public and Asia Aviation Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Aviation Public and Lam Soon 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 Lam Soon Public are associated (or correlated) with Asia Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Aviation Public has no effect on the direction of Lam Soon i.e., Lam Soon and Asia Aviation go up and down completely randomly.
Pair Corralation between Lam Soon and Asia Aviation
Assuming the 90 days trading horizon Lam Soon Public is expected to generate 0.67 times more return on investment than Asia Aviation. However, Lam Soon Public is 1.5 times less risky than Asia Aviation. It trades about 0.11 of its potential returns per unit of risk. Asia Aviation Public is currently generating about -0.11 per unit of risk. If you would invest 492.00 in Lam Soon Public on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Lam Soon Public or generate 2.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lam Soon Public vs. Asia Aviation Public
Performance |
| Timeline |
| Lam Soon Public |
| Asia Aviation Public |
Lam Soon and Asia Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Soon and Asia Aviation
The main advantage of trading using opposite Lam Soon and Asia Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Soon position performs unexpectedly, Asia Aviation 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 Asia Aviation will offset losses from the drop in Asia Aviation's long position.| Lam Soon vs. Haad Thip Public | Lam Soon vs. Hwa Fong Rubber | Lam Soon vs. GFPT Public | Lam Soon vs. KGI Securities Public |
| Asia Aviation vs. Airports of Thailand | Asia Aviation vs. Bangkok Expressway and | Asia Aviation vs. BTS Group Holdings | Asia Aviation vs. Bangkok Airways 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |