Correlation Between Lam Soon and Syntec Construction
Can any of the company-specific risk be diversified away by investing in both Lam Soon and Syntec Construction 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 Syntec Construction 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 Syntec Construction Public, you can compare the effects of market volatilities on Lam Soon and Syntec Construction 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 Syntec Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Soon and Syntec Construction.
Diversification Opportunities for Lam Soon and Syntec Construction
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lam and Syntec is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lam Soon Public and Syntec Construction Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntec Construction 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 Syntec Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syntec Construction has no effect on the direction of Lam Soon i.e., Lam Soon and Syntec Construction go up and down completely randomly.
Pair Corralation between Lam Soon and Syntec Construction
Assuming the 90 days trading horizon Lam Soon Public is expected to generate 34.26 times more return on investment than Syntec Construction. However, Lam Soon is 34.26 times more volatile than Syntec Construction Public. It trades about 0.04 of its potential returns per unit of risk. Syntec Construction Public is currently generating about -0.01 per unit of risk. If you would invest 463.00 in Lam Soon Public on November 27, 2024 and sell it today you would earn a total of 29.00 from holding Lam Soon Public or generate 6.26% 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. Syntec Construction Public
Performance |
| Timeline |
| Lam Soon Public |
| Syntec Construction |
Lam Soon and Syntec Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lam Soon and Syntec Construction
The main advantage of trading using opposite Lam Soon and Syntec Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Soon position performs unexpectedly, Syntec Construction 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 Syntec Construction will offset losses from the drop in Syntec Construction'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 |
| Syntec Construction vs. Tipco Foods Public | Syntec Construction vs. STPI Public | Syntec Construction vs. Seafco Public | Syntec Construction vs. Tipco Asphalt 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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