Correlation Between MCS Steel and Lalin Property
Can any of the company-specific risk be diversified away by investing in both MCS Steel 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 MCS Steel and Lalin Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCS Steel Public and Lalin Property Public, you can compare the effects of market volatilities on MCS Steel 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 MCS Steel with a short position of Lalin Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCS Steel and Lalin Property.
Diversification Opportunities for MCS Steel and Lalin Property
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MCS and Lalin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding MCS Steel 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 MCS Steel 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 MCS Steel 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 MCS Steel i.e., MCS Steel and Lalin Property go up and down completely randomly.
Pair Corralation between MCS Steel and Lalin Property
Assuming the 90 days trading horizon MCS Steel Public is expected to generate 63.7 times more return on investment than Lalin Property. However, MCS Steel is 63.7 times more volatile than Lalin Property Public. It trades about 0.04 of its potential returns per unit of risk. Lalin Property Public is currently generating about -0.06 per unit of risk. If you would invest 817.00 in MCS Steel Public on August 24, 2024 and sell it today you would lose (87.00) from holding MCS Steel Public or give up 10.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCS Steel Public vs. Lalin Property Public
Performance |
| Timeline |
| MCS Steel Public |
| Lalin Property Public |
MCS Steel and Lalin Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCS Steel and Lalin Property
The main advantage of trading using opposite MCS Steel and Lalin Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCS Steel 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.| MCS Steel vs. Lalin Property Public | MCS Steel vs. Land and Houses | MCS Steel vs. Banpu Public | MCS Steel vs. TISCO Financial Group |
| Lalin Property vs. AP Public | Lalin Property vs. Land and Houses | Lalin Property vs. LPN Development Public | Lalin Property vs. Supalai 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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