Correlation Between Lam Soon and Internet Thailand
Can any of the company-specific risk be diversified away by investing in both Lam Soon and Internet Thailand 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 Internet Thailand 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 Internet Thailand Public, you can compare the effects of market volatilities on Lam Soon and Internet Thailand 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 Internet Thailand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Soon and Internet Thailand.
Diversification Opportunities for Lam Soon and Internet Thailand
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lam and Internet is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lam Soon Public and Internet Thailand Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand 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 Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand Public has no effect on the direction of Lam Soon i.e., Lam Soon and Internet Thailand go up and down completely randomly.
Pair Corralation between Lam Soon and Internet Thailand
Assuming the 90 days trading horizon Lam Soon Public is expected to generate 0.12 times more return on investment than Internet Thailand. However, Lam Soon Public is 8.35 times less risky than Internet Thailand. It trades about 0.05 of its potential returns per unit of risk. Internet Thailand Public is currently generating about -0.1 per unit of risk. If you would invest 486.00 in Lam Soon Public on October 24, 2024 and sell it today you would earn a total of 2.00 from holding Lam Soon Public or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lam Soon Public vs. Internet Thailand Public
Performance |
| Timeline |
| Lam Soon Public |
| Internet Thailand Public |
Lam Soon and Internet Thailand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Soon and Internet Thailand
The main advantage of trading using opposite Lam Soon and Internet Thailand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Soon position performs unexpectedly, Internet Thailand 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 Internet Thailand will offset losses from the drop in Internet Thailand'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 |
| Internet Thailand vs. Jasmine International Public | Internet Thailand vs. Hana Microelectronics Public | Internet Thailand vs. AP Public | Internet Thailand vs. KCE Electronics 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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