Correlation Between Lam Soon and CH Karnchang
Can any of the company-specific risk be diversified away by investing in both Lam Soon and CH Karnchang 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 CH Karnchang 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 CH Karnchang Public, you can compare the effects of market volatilities on Lam Soon and CH Karnchang 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 CH Karnchang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Soon and CH Karnchang.
Diversification Opportunities for Lam Soon and CH Karnchang
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lam and CH Karnchang is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lam Soon Public and CH Karnchang Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Karnchang 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 CH Karnchang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Karnchang Public has no effect on the direction of Lam Soon i.e., Lam Soon and CH Karnchang go up and down completely randomly.
Pair Corralation between Lam Soon and CH Karnchang
Assuming the 90 days trading horizon Lam Soon Public is expected to generate 0.69 times more return on investment than CH Karnchang. However, Lam Soon Public is 1.46 times less risky than CH Karnchang. It trades about 0.11 of its potential returns per unit of risk. CH Karnchang Public is currently generating about -0.14 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lam Soon Public vs. CH Karnchang Public
Performance |
| Timeline |
| Lam Soon Public |
| CH Karnchang Public |
Lam Soon and CH Karnchang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Soon and CH Karnchang
The main advantage of trading using opposite Lam Soon and CH Karnchang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Soon position performs unexpectedly, CH Karnchang 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 CH Karnchang will offset losses from the drop in CH Karnchang'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 |
| CH Karnchang vs. Gulf Energy Development | CH Karnchang vs. Energy Absolute Public | CH Karnchang vs. WHA Public | CH Karnchang vs. Bangkok Expressway and |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |