Correlation Between Lam Soon and Newcity Public
Can any of the company-specific risk be diversified away by investing in both Lam Soon and Newcity Public 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 Newcity Public 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 Newcity Public, you can compare the effects of market volatilities on Lam Soon and Newcity Public 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 Newcity Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Soon and Newcity Public.
Diversification Opportunities for Lam Soon and Newcity Public
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lam and Newcity is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lam Soon Public and Newcity Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcity 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 Newcity Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcity Public has no effect on the direction of Lam Soon i.e., Lam Soon and Newcity Public go up and down completely randomly.
Pair Corralation between Lam Soon and Newcity Public
Assuming the 90 days trading horizon Lam Soon Public is expected to generate 0.17 times more return on investment than Newcity Public. However, Lam Soon Public is 5.72 times less risky than Newcity Public. It trades about 0.11 of its potential returns per unit of risk. Newcity Public is currently generating about -0.05 per unit of risk. If you would invest 486.00 in Lam Soon Public on August 25, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lam Soon Public vs. Newcity Public
Performance |
| Timeline |
| Lam Soon Public |
| Newcity Public |
Lam Soon and Newcity Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Soon and Newcity Public
The main advantage of trading using opposite Lam Soon and Newcity Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Soon position performs unexpectedly, Newcity Public 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 Newcity Public will offset losses from the drop in Newcity Public's long position.| Lam Soon vs. CP ALL Public | Lam Soon vs. Carabao Group Public | Lam Soon vs. Thai Union Group | Lam Soon vs. Minor International Public |
| Newcity Public vs. SCB X Public | Newcity Public vs. Kasikornbank Public | Newcity Public vs. PTT Public | Newcity Public vs. Kasikornbank 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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