Correlation Between MBK Public and LPN Development
Can any of the company-specific risk be diversified away by investing in both MBK Public and LPN Development 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 MBK Public and LPN Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MBK Public and LPN Development Public, you can compare the effects of market volatilities on MBK Public and LPN Development 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 MBK Public with a short position of LPN Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBK Public and LPN Development.
Diversification Opportunities for MBK Public and LPN Development
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MBK and LPN is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding MBK Public and LPN Development Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPN Development Public and MBK Public 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 MBK Public are associated (or correlated) with LPN Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPN Development Public has no effect on the direction of MBK Public i.e., MBK Public and LPN Development go up and down completely randomly.
Pair Corralation between MBK Public and LPN Development
Assuming the 90 days trading horizon MBK Public is expected to generate 44.26 times less return on investment than LPN Development. But when comparing it to its historical volatility, MBK Public is 33.07 times less risky than LPN Development. It trades about 0.04 of its potential returns per unit of risk. LPN Development Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 373.00 in LPN Development Public on November 3, 2024 and sell it today you would lose (153.00) from holding LPN Development Public or give up 41.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
MBK Public vs. LPN Development Public
Performance |
| Timeline |
| MBK Public |
| LPN Development Public |
MBK Public and LPN Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBK Public and LPN Development
The main advantage of trading using opposite MBK Public and LPN Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBK Public position performs unexpectedly, LPN Development 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 LPN Development will offset losses from the drop in LPN Development's long position.| MBK Public vs. Land and Houses | MBK Public vs. Central Pattana Public | MBK Public vs. AP Public | MBK Public vs. Quality Houses Public |
| LPN Development vs. Land and Houses | LPN Development vs. AP Public | LPN Development vs. Quality Houses Public | LPN Development vs. Siri Prime Office |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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