Correlation Between Lam Soon and Haad Thip
Can any of the company-specific risk be diversified away by investing in both Lam Soon and Haad Thip 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 Haad Thip 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 Haad Thip Public, you can compare the effects of market volatilities on Lam Soon and Haad Thip 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 Haad Thip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Soon and Haad Thip.
Diversification Opportunities for Lam Soon and Haad Thip
Modest diversification
The 3 months correlation between Lam and Haad is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lam Soon Public and Haad Thip Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haad Thip 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 Haad Thip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haad Thip Public has no effect on the direction of Lam Soon i.e., Lam Soon and Haad Thip go up and down completely randomly.
Pair Corralation between Lam Soon and Haad Thip
Assuming the 90 days trading horizon Lam Soon Public is expected to generate 26.49 times more return on investment than Haad Thip. However, Lam Soon is 26.49 times more volatile than Haad Thip Public. It trades about 0.04 of its potential returns per unit of risk. Haad Thip Public is currently generating about 0.04 per unit of risk. If you would invest 458.00 in Lam Soon Public on September 4, 2024 and sell it today you would earn a total of 47.00 from holding Lam Soon Public or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Lam Soon Public vs. Haad Thip Public
Performance |
| Timeline |
| Lam Soon Public |
| Haad Thip Public |
Lam Soon and Haad Thip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Soon and Haad Thip
The main advantage of trading using opposite Lam Soon and Haad Thip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Soon position performs unexpectedly, Haad Thip 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 Haad Thip will offset losses from the drop in Haad Thip's long position.| Lam Soon vs. Airports of Thailand | Lam Soon vs. PTT Public | Lam Soon vs. Bangkok Dusit Medical | Lam Soon vs. Kasikornbank Public |
| Haad Thip vs. Charoen Pokphand Foods | Haad Thip vs. Carabao Group Public | Haad Thip vs. Home Product Center | Haad Thip vs. Ichitan Group 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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