Correlation Between Eureka Design and Lohakit Metal
Can any of the company-specific risk be diversified away by investing in both Eureka Design 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 Eureka Design and Lohakit Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eureka Design Public and Lohakit Metal Public, you can compare the effects of market volatilities on Eureka Design 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 Eureka Design with a short position of Lohakit Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eureka Design and Lohakit Metal.
Diversification Opportunities for Eureka Design and Lohakit Metal
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eureka and Lohakit is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Eureka Design 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 Eureka Design 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 Eureka Design 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 Eureka Design i.e., Eureka Design and Lohakit Metal go up and down completely randomly.
Pair Corralation between Eureka Design and Lohakit Metal
Assuming the 90 days trading horizon Eureka Design Public is expected to generate 4.43 times more return on investment than Lohakit Metal. However, Eureka Design is 4.43 times more volatile than Lohakit Metal Public. It trades about 0.19 of its potential returns per unit of risk. Lohakit Metal Public is currently generating about -0.03 per unit of risk. If you would invest 49.00 in Eureka Design Public on November 2, 2024 and sell it today you would earn a total of 39.00 from holding Eureka Design Public or generate 79.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eureka Design Public vs. Lohakit Metal Public
Performance |
| Timeline |
| Eureka Design Public |
| Lohakit Metal Public |
Eureka Design and Lohakit Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eureka Design and Lohakit Metal
The main advantage of trading using opposite Eureka Design and Lohakit Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eureka Design 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.| Eureka Design vs. Union Petrochemical Public | Eureka Design vs. TV Thunder Public | Eureka Design vs. Exotic Food Public | Eureka Design vs. TWZ Public |
| Lohakit Metal vs. MCS Steel Public | Lohakit Metal vs. Asia Plus Group | Lohakit Metal vs. Lalin Property Public | Lohakit Metal vs. Lam Soon Public |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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