Correlation Between Lam Soon and Lalin Property
Can any of the company-specific risk be diversified away by investing in both Lam Soon and Lalin Property 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 Lalin Property 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 Lalin Property Public, you can compare the effects of market volatilities on Lam Soon and Lalin Property 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 Lalin Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Soon and Lalin Property.
Diversification Opportunities for Lam Soon and Lalin Property
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lam and Lalin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lam Soon Public and Lalin Property Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lalin Property 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 Lalin Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lalin Property Public has no effect on the direction of Lam Soon i.e., Lam Soon and Lalin Property go up and down completely randomly.
Pair Corralation between Lam Soon and Lalin Property
Assuming the 90 days trading horizon Lam Soon Public is expected to generate 1.17 times more return on investment than Lalin Property. However, Lam Soon is 1.17 times more volatile than Lalin Property Public. It trades about 0.11 of its potential returns per unit of risk. Lalin Property Public is currently generating about -0.27 per unit of risk. If you would invest 486.00 in Lam Soon Public on August 26, 2024 and sell it today you would earn a total of 12.00 from holding Lam Soon Public or generate 2.47% 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. Lalin Property Public
Performance |
| Timeline |
| Lam Soon Public |
| Lalin Property Public |
Lam Soon and Lalin Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Soon and Lalin Property
The main advantage of trading using opposite Lam Soon and Lalin Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Soon position performs unexpectedly, Lalin Property 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 Lalin Property will offset losses from the drop in Lalin Property's long position.| Lam Soon vs. Thai Union Group | Lam Soon vs. Minor International Public | Lam Soon vs. Central Pattana 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |