Correlation Between Lam Soon and Airports
Can any of the company-specific risk be diversified away by investing in both Lam Soon and Airports 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 Airports 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 Airports of Thailand, you can compare the effects of market volatilities on Lam Soon and Airports 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 Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Soon and Airports.
Diversification Opportunities for Lam Soon and Airports
Excellent diversification
The 3 months correlation between Lam and Airports is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lam Soon Public and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand 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 Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of Lam Soon i.e., Lam Soon and Airports go up and down completely randomly.
Pair Corralation between Lam Soon and Airports
Assuming the 90 days trading horizon Lam Soon Public is expected to under-perform the Airports. But the stock apears to be less risky and, when comparing its historical volatility, Lam Soon Public is 1.28 times less risky than Airports. The stock trades about -0.07 of its potential returns per unit of risk. The Airports of Thailand is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,998 in Airports of Thailand on September 12, 2024 and sell it today you would earn a total of 52.00 from holding Airports of Thailand or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lam Soon Public vs. Airports of Thailand
Performance |
| Timeline |
| Lam Soon Public |
| Airports of Thailand |
Lam Soon and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Soon and Airports
The main advantage of trading using opposite Lam Soon and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Soon position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' 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 |
| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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