Correlation Between Multi National and LH Shopping
Can any of the company-specific risk be diversified away by investing in both Multi National and LH Shopping 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 Multi National and LH Shopping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi National Residence and LH Shopping Centers, you can compare the effects of market volatilities on Multi National and LH Shopping 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 Multi National with a short position of LH Shopping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi National and LH Shopping.
Diversification Opportunities for Multi National and LH Shopping
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Multi and LHSC is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Multi National Residence and LH Shopping Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LH Shopping Centers and Multi National 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 Multi National Residence are associated (or correlated) with LH Shopping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LH Shopping Centers has no effect on the direction of Multi National i.e., Multi National and LH Shopping go up and down completely randomly.
Pair Corralation between Multi National and LH Shopping
Assuming the 90 days trading horizon Multi National Residence is expected to generate 237.56 times more return on investment than LH Shopping. However, Multi National is 237.56 times more volatile than LH Shopping Centers. It trades about 0.28 of its potential returns per unit of risk. LH Shopping Centers is currently generating about 0.12 per unit of risk. If you would invest 270.00 in Multi National Residence on September 3, 2024 and sell it today you would lose (26.00) from holding Multi National Residence or give up 9.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.3% |
| Values | Daily Returns |
Multi National Residence vs. LH Shopping Centers
Performance |
| Timeline |
| Multi National Residence |
| LH Shopping Centers |
Multi National and LH Shopping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi National and LH Shopping
The main advantage of trading using opposite Multi National and LH Shopping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi National position performs unexpectedly, LH Shopping 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 LH Shopping will offset losses from the drop in LH Shopping's long position.| Multi National vs. Delta Electronics Public | Multi National vs. Delta Electronics Public | Multi National vs. Airports of Thailand | Multi National vs. Airports of Thailand |
| LH Shopping vs. LH Hotel Leasehold | LH Shopping vs. Impact Growth REIT | LH Shopping vs. Quality Houses Property | LH Shopping vs. CPN Retail Growth |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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