Correlation Between Prime Office and Lohakit Metal
Can any of the company-specific risk be diversified away by investing in both Prime Office and Lohakit Metal 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 Prime Office and Lohakit Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Office Leasehold and Lohakit Metal Public, you can compare the effects of market volatilities on Prime Office and Lohakit Metal 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 Prime Office with a short position of Lohakit Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Office and Lohakit Metal.
Diversification Opportunities for Prime Office and Lohakit Metal
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prime and Lohakit is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Prime Office Leasehold and Lohakit Metal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lohakit Metal Public and Prime Office 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 Prime Office Leasehold are associated (or correlated) with Lohakit Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lohakit Metal Public has no effect on the direction of Prime Office i.e., Prime Office and Lohakit Metal go up and down completely randomly.
Pair Corralation between Prime Office and Lohakit Metal
Assuming the 90 days trading horizon Prime Office Leasehold is expected to generate 0.89 times more return on investment than Lohakit Metal. However, Prime Office Leasehold is 1.12 times less risky than Lohakit Metal. It trades about 0.0 of its potential returns per unit of risk. Lohakit Metal Public is currently generating about -0.37 per unit of risk. If you would invest 625.00 in Prime Office Leasehold on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Prime Office Leasehold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Office Leasehold vs. Lohakit Metal Public
Performance |
| Timeline |
| Prime Office Leasehold |
| Lohakit Metal Public |
Prime Office and Lohakit Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Office and Lohakit Metal
The main advantage of trading using opposite Prime Office and Lohakit Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Office position performs unexpectedly, Lohakit Metal 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 Lohakit Metal will offset losses from the drop in Lohakit Metal's long position.| Prime Office vs. CPN Commercial Growth | Prime Office vs. Quality Houses Property | Prime Office vs. LH Shopping Centers | Prime Office vs. The Erawan Group |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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