Correlation Between Newcity Public and Lam Soon
Can any of the company-specific risk be diversified away by investing in both Newcity Public and Lam Soon 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 Newcity Public and Lam Soon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcity Public and Lam Soon Public, you can compare the effects of market volatilities on Newcity Public and Lam Soon 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 Newcity Public with a short position of Lam Soon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcity Public and Lam Soon.
Diversification Opportunities for Newcity Public and Lam Soon
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Newcity and Lam is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Newcity Public and Lam Soon Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lam Soon Public and Newcity 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 Newcity Public are associated (or correlated) with Lam Soon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lam Soon Public has no effect on the direction of Newcity Public i.e., Newcity Public and Lam Soon go up and down completely randomly.
Pair Corralation between Newcity Public and Lam Soon
Assuming the 90 days horizon Newcity Public is expected to under-perform the Lam Soon. In addition to that, Newcity Public is 5.6 times more volatile than Lam Soon Public. It trades about -0.06 of its total potential returns per unit of risk. Lam Soon Public is currently generating about 0.17 per unit of volatility. If you would invest 486.00 in Lam Soon Public on August 28, 2024 and sell it today you would earn a total of 19.00 from holding Lam Soon Public or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newcity Public vs. Lam Soon Public
Performance |
| Timeline |
| Newcity Public |
| Lam Soon Public |
Newcity Public and Lam Soon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcity Public and Lam Soon
The main advantage of trading using opposite Newcity Public and Lam Soon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcity Public position performs unexpectedly, Lam Soon 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 Lam Soon will offset losses from the drop in Lam Soon's long position.| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |