Correlation Between Stock Exchange and LH Shopping
Can any of the company-specific risk be diversified away by investing in both Stock Exchange and LH Shopping 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 Stock Exchange and LH Shopping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stock Exchange Of and LH Shopping Centers, you can compare the effects of market volatilities on Stock Exchange and LH Shopping 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 Stock Exchange with a short position of LH Shopping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and LH Shopping.
Diversification Opportunities for Stock Exchange and LH Shopping
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stock and LHSC is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and LH Shopping Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LH Shopping Centers and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with LH Shopping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LH Shopping Centers has no effect on the direction of Stock Exchange i.e., Stock Exchange and LH Shopping go up and down completely randomly.
Pair Corralation between Stock Exchange and LH Shopping
Assuming the 90 days trading horizon Stock Exchange Of is expected to under-perform the LH Shopping. But the index apears to be less risky and, when comparing its historical volatility, Stock Exchange Of is 1.28 times less risky than LH Shopping. The index trades about -0.09 of its potential returns per unit of risk. The LH Shopping Centers is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,073 in LH Shopping Centers on August 31, 2024 and sell it today you would earn a total of 57.00 from holding LH Shopping Centers or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stock Exchange Of vs. LH Shopping Centers
Performance |
| Timeline |
Stock Exchange and LH Shopping Volatility Contrast
Predicted Return Density |
| Returns |
Stock Exchange Of
Pair trading matchups for Stock Exchange
LH Shopping Centers
Pair trading matchups for LH Shopping
Pair Trading with Stock Exchange and LH Shopping
The main advantage of trading using opposite Stock Exchange and LH Shopping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stock Exchange position performs unexpectedly, LH Shopping 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 Shopping will offset losses from the drop in LH Shopping's long position.| Stock Exchange vs. Jasmine Telecom Systems | Stock Exchange vs. TMBThanachart Bank Public | Stock Exchange vs. Information and Communication | Stock Exchange vs. TISCO Financial Group |
| LH Shopping vs. LH Hotel Leasehold | LH Shopping vs. Impact Growth REIT | LH Shopping vs. Quality Houses Property | LH Shopping vs. CPN Retail Growth |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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