Correlation Between Rojana Industrial and Lohakit Metal
Can any of the company-specific risk be diversified away by investing in both Rojana Industrial 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 Rojana Industrial and Lohakit Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rojana Industrial Park and Lohakit Metal Public, you can compare the effects of market volatilities on Rojana Industrial 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 Rojana Industrial with a short position of Lohakit Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rojana Industrial and Lohakit Metal.
Diversification Opportunities for Rojana Industrial and Lohakit Metal
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rojana and Lohakit is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Rojana Industrial Park 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 Rojana Industrial 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 Rojana Industrial Park 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 Rojana Industrial i.e., Rojana Industrial and Lohakit Metal go up and down completely randomly.
Pair Corralation between Rojana Industrial and Lohakit Metal
Assuming the 90 days trading horizon Rojana Industrial Park is expected to under-perform the Lohakit Metal. In addition to that, Rojana Industrial is 3.0 times more volatile than Lohakit Metal Public. It trades about -0.26 of its total potential returns per unit of risk. Lohakit Metal Public is currently generating about -0.37 per unit of volatility. If you would invest 368.00 in Lohakit Metal Public on October 20, 2024 and sell it today you would lose (16.00) from holding Lohakit Metal Public or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rojana Industrial Park vs. Lohakit Metal Public
Performance |
| Timeline |
| Rojana Industrial Park |
| Lohakit Metal Public |
Rojana Industrial and Lohakit Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rojana Industrial and Lohakit Metal
The main advantage of trading using opposite Rojana Industrial and Lohakit Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rojana Industrial 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.| Rojana Industrial vs. Ratch Group Public | Rojana Industrial vs. RPCG Public | Rojana Industrial vs. Siam City Cement | Rojana Industrial vs. Siamgas and Petrochemicals |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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