Correlation Between ONE Enterprise and LH Financial
Can any of the company-specific risk be diversified away by investing in both ONE Enterprise and LH Financial 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 ONE Enterprise and LH Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The ONE Enterprise and LH Financial Group, you can compare the effects of market volatilities on ONE Enterprise and LH Financial 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 ONE Enterprise with a short position of LH Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONE Enterprise and LH Financial.
Diversification Opportunities for ONE Enterprise and LH Financial
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ONE and LHFG is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding The ONE Enterprise and LH Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LH Financial Group and ONE Enterprise 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 The ONE Enterprise are associated (or correlated) with LH Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LH Financial Group has no effect on the direction of ONE Enterprise i.e., ONE Enterprise and LH Financial go up and down completely randomly.
Pair Corralation between ONE Enterprise and LH Financial
Assuming the 90 days trading horizon The ONE Enterprise is expected to under-perform the LH Financial. But the stock apears to be less risky and, when comparing its historical volatility, The ONE Enterprise is 1.49 times less risky than LH Financial. The stock trades about -0.22 of its potential returns per unit of risk. The LH Financial Group is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 84.00 in LH Financial Group on September 1, 2024 and sell it today you would lose (3.00) from holding LH Financial Group or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The ONE Enterprise vs. LH Financial Group
Performance |
| Timeline |
| ONE Enterprise |
| LH Financial Group |
ONE Enterprise and LH Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONE Enterprise and LH Financial
The main advantage of trading using opposite ONE Enterprise and LH Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONE Enterprise position performs unexpectedly, LH Financial 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 Financial will offset losses from the drop in LH Financial's long position.| ONE Enterprise vs. Plan B Media | ONE Enterprise vs. Origin Property PCL | ONE Enterprise vs. Gulf Energy Development | ONE Enterprise vs. PTT Oil and |
| LH Financial vs. PTT Public | LH Financial vs. The Siam Commercial | LH Financial vs. CP ALL Public | LH Financial vs. SCB X 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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