Correlation Between Noble Development and Lalin Property
Can any of the company-specific risk be diversified away by investing in both Noble Development 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 Noble Development and Lalin Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble Development Public and Lalin Property Public, you can compare the effects of market volatilities on Noble Development 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 Noble Development with a short position of Lalin Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Development and Lalin Property.
Diversification Opportunities for Noble Development and Lalin Property
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Noble and Lalin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Noble Development 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 Noble Development 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 Noble Development 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 Noble Development i.e., Noble Development and Lalin Property go up and down completely randomly.
Pair Corralation between Noble Development and Lalin Property
Assuming the 90 days trading horizon Noble Development Public is expected to generate 1.01 times more return on investment than Lalin Property. However, Noble Development is 1.01 times more volatile than Lalin Property Public. It trades about -0.17 of its potential returns per unit of risk. Lalin Property Public is currently generating about -0.18 per unit of risk. If you would invest 301.00 in Noble Development Public on September 13, 2024 and sell it today you would lose (17.00) from holding Noble Development Public or give up 5.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noble Development Public vs. Lalin Property Public
Performance |
| Timeline |
| Noble Development Public |
| Lalin Property Public |
Noble Development and Lalin Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Development and Lalin Property
The main advantage of trading using opposite Noble Development and Lalin Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Development 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.| Noble Development vs. Land and Houses | Noble Development vs. AP Public | Noble Development vs. Lalin Property Public | Noble Development vs. Quality Houses Public |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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