Correlation Between President Bakery and LH Shopping
Can any of the company-specific risk be diversified away by investing in both President Bakery 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 President Bakery and LH Shopping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between President Bakery Public and LH Shopping Centers, you can compare the effects of market volatilities on President Bakery 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 President Bakery with a short position of LH Shopping. Check out your portfolio center. Please also check ongoing floating volatility patterns of President Bakery and LH Shopping.
Diversification Opportunities for President Bakery and LH Shopping
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between President and LHSC is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding President Bakery Public 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 President Bakery 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 President Bakery Public 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 President Bakery i.e., President Bakery and LH Shopping go up and down completely randomly.
Pair Corralation between President Bakery and LH Shopping
Assuming the 90 days horizon President Bakery Public is expected to under-perform the LH Shopping. In addition to that, President Bakery is 1.61 times more volatile than LH Shopping Centers. It trades about -0.09 of its total potential returns per unit of risk. LH Shopping Centers is currently generating about 0.14 per unit of volatility. If you would invest 1,130 in LH Shopping Centers on November 2, 2024 and sell it today you would earn a total of 20.00 from holding LH Shopping Centers or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
President Bakery Public vs. LH Shopping Centers
Performance |
| Timeline |
| President Bakery Public |
| LH Shopping Centers |
President Bakery and LH Shopping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with President Bakery and LH Shopping
The main advantage of trading using opposite President Bakery and LH Shopping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if President Bakery 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.| President Bakery vs. MK Restaurant Group | President Bakery vs. Haad Thip Public | President Bakery vs. Thai President Foods | President Bakery vs. Minor International 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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