Correlation Between RS Public and Lohakit Metal
Can any of the company-specific risk be diversified away by investing in both RS Public 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 RS Public and Lohakit Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RS Public and Lohakit Metal Public, you can compare the effects of market volatilities on RS Public 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 RS Public with a short position of Lohakit Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of RS Public and Lohakit Metal.
Diversification Opportunities for RS Public and Lohakit Metal
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RS-R and Lohakit is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding RS Public 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 RS Public 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 RS Public 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 RS Public i.e., RS Public and Lohakit Metal go up and down completely randomly.
Pair Corralation between RS Public and Lohakit Metal
Assuming the 90 days trading horizon RS Public is expected to generate 209.75 times more return on investment than Lohakit Metal. However, RS Public is 209.75 times more volatile than Lohakit Metal Public. It trades about 0.16 of its potential returns per unit of risk. Lohakit Metal Public is currently generating about 0.09 per unit of risk. If you would invest 720.00 in RS Public on September 2, 2024 and sell it today you would lose (150.00) from holding RS Public or give up 20.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RS Public vs. Lohakit Metal Public
Performance |
| Timeline |
| RS Public |
| Lohakit Metal Public |
RS Public and Lohakit Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RS Public and Lohakit Metal
The main advantage of trading using opposite RS Public and Lohakit Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RS Public 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.| RS Public vs. Major Cineplex Group | RS Public vs. The Erawan Group | RS Public vs. Autocorp Holding Public | RS Public vs. XSpring Capital 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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