Correlation Between Ratch Group and Lanna Resources
Can any of the company-specific risk be diversified away by investing in both Ratch Group and Lanna Resources 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 Ratch Group and Lanna Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ratch Group Public and Lanna Resources Public, you can compare the effects of market volatilities on Ratch Group and Lanna Resources 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 Ratch Group with a short position of Lanna Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ratch Group and Lanna Resources.
Diversification Opportunities for Ratch Group and Lanna Resources
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ratch and Lanna is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ratch Group Public and Lanna Resources Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanna Resources Public and Ratch Group 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 Ratch Group Public are associated (or correlated) with Lanna Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanna Resources Public has no effect on the direction of Ratch Group i.e., Ratch Group and Lanna Resources go up and down completely randomly.
Pair Corralation between Ratch Group and Lanna Resources
Assuming the 90 days trading horizon Ratch Group is expected to generate 1.97 times less return on investment than Lanna Resources. In addition to that, Ratch Group is 1.07 times more volatile than Lanna Resources Public. It trades about 0.04 of its total potential returns per unit of risk. Lanna Resources Public is currently generating about 0.08 per unit of volatility. If you would invest 1,263 in Lanna Resources Public on September 4, 2024 and sell it today you would earn a total of 327.00 from holding Lanna Resources Public or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ratch Group Public vs. Lanna Resources Public
Performance |
| Timeline |
| Ratch Group Public |
| Lanna Resources Public |
Ratch Group and Lanna Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ratch Group and Lanna Resources
The main advantage of trading using opposite Ratch Group and Lanna Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ratch Group position performs unexpectedly, Lanna Resources 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 Lanna Resources will offset losses from the drop in Lanna Resources' long position.| Ratch Group vs. Electricity Generating Public | Ratch Group vs. PTT Public | Ratch Group vs. Advanced Info Service | Ratch Group vs. The Siam Cement |
| Lanna Resources vs. PTT Public | Lanna Resources vs. SCB X Public | Lanna Resources vs. The Siam Commercial | Lanna Resources vs. The Siam Cement |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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