Correlation Between VGI Public and LH Financial
Can any of the company-specific risk be diversified away by investing in both VGI Public 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 VGI Public and LH Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGI Public and LH Financial Group, you can compare the effects of market volatilities on VGI Public 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 VGI Public with a short position of LH Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGI Public and LH Financial.
Diversification Opportunities for VGI Public and LH Financial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VGI and LHFG is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public 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 VGI 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 VGI Public 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 VGI Public i.e., VGI Public and LH Financial go up and down completely randomly.
Pair Corralation between VGI Public and LH Financial
Assuming the 90 days trading horizon VGI Public is expected to generate 0.16 times more return on investment than LH Financial. However, VGI Public is 6.08 times less risky than LH Financial. It trades about -0.21 of its potential returns per unit of risk. LH Financial Group is currently generating about -0.08 per unit of risk. If you would invest 286.00 in VGI Public on September 1, 2024 and sell it today you would lose (4.00) from holding VGI Public or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
VGI Public vs. LH Financial Group
Performance |
| Timeline |
| VGI Public |
| LH Financial Group |
VGI Public and LH Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGI Public and LH Financial
The main advantage of trading using opposite VGI Public and LH Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGI Public 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.| VGI Public vs. WHA Public | VGI Public vs. Thai Union Group | VGI Public vs. VGI Public | VGI Public vs. Thai Vegetable Oil |
| LH Financial vs. PTT Public | LH Financial vs. The Siam Commercial | LH Financial vs. CP ALL Public | LH Financial vs. SCB X 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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