Correlation Between Siam Commercial and LH Financial
Can any of the company-specific risk be diversified away by investing in both Siam Commercial and LH Financial 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 Siam Commercial and LH Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Siam Commercial and LH Financial Group, you can compare the effects of market volatilities on Siam Commercial and LH Financial 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 Siam Commercial with a short position of LH Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Commercial and LH Financial.
Diversification Opportunities for Siam Commercial and LH Financial
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Siam and LHFG is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Commercial and LH Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LH Financial Group and Siam Commercial 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 The Siam Commercial are associated (or correlated) with LH Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LH Financial Group has no effect on the direction of Siam Commercial i.e., Siam Commercial and LH Financial go up and down completely randomly.
Pair Corralation between Siam Commercial and LH Financial
Assuming the 90 days trading horizon Siam Commercial is expected to generate 1.49 times less return on investment than LH Financial. But when comparing it to its historical volatility, The Siam Commercial is 1.12 times less risky than LH Financial. It trades about 0.08 of its potential returns per unit of risk. LH Financial Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 75.00 in LH Financial Group on November 27, 2024 and sell it today you would earn a total of 2.00 from holding LH Financial Group or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Siam Commercial vs. LH Financial Group
Performance |
| Timeline |
| Siam Commercial |
| LH Financial Group |
Siam Commercial and LH Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Commercial and LH Financial
The main advantage of trading using opposite Siam Commercial and LH Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Commercial position performs unexpectedly, LH Financial 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 Financial will offset losses from the drop in LH Financial's long position.| Siam Commercial vs. The Siam Cement | Siam Commercial vs. Krung Thai Bank | Siam Commercial vs. Kasikornbank Public | Siam Commercial vs. CP ALL Public |
| LH Financial vs. Quality Houses Public | LH Financial vs. Kiatnakin Phatra Bank | LH Financial vs. Land and Houses | LH Financial vs. TISCO Financial Group |
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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