Correlation Between Omesti Bhd and LPI Capital
Can any of the company-specific risk be diversified away by investing in both Omesti Bhd and LPI Capital 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 Omesti Bhd and LPI Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omesti Bhd and LPI Capital Bhd, you can compare the effects of market volatilities on Omesti Bhd and LPI Capital 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 Omesti Bhd with a short position of LPI Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omesti Bhd and LPI Capital.
Diversification Opportunities for Omesti Bhd and LPI Capital
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Omesti and LPI is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Omesti Bhd and LPI Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPI Capital Bhd and Omesti Bhd 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 Omesti Bhd are associated (or correlated) with LPI Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPI Capital Bhd has no effect on the direction of Omesti Bhd i.e., Omesti Bhd and LPI Capital go up and down completely randomly.
Pair Corralation between Omesti Bhd and LPI Capital
Assuming the 90 days trading horizon Omesti Bhd is expected to generate 10.04 times more return on investment than LPI Capital. However, Omesti Bhd is 10.04 times more volatile than LPI Capital Bhd. It trades about 0.05 of its potential returns per unit of risk. LPI Capital Bhd is currently generating about -0.07 per unit of risk. If you would invest 14.00 in Omesti Bhd on September 25, 2024 and sell it today you would earn a total of 1.00 from holding Omesti Bhd or generate 7.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Omesti Bhd vs. LPI Capital Bhd
Performance |
Timeline |
Omesti Bhd |
LPI Capital Bhd |
Omesti Bhd and LPI Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Omesti Bhd and LPI Capital
The main advantage of trading using opposite Omesti Bhd and LPI Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omesti Bhd position performs unexpectedly, LPI Capital 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 LPI Capital will offset losses from the drop in LPI Capital's long position.Omesti Bhd vs. Malayan Banking Bhd | Omesti Bhd vs. Public Bank Bhd | Omesti Bhd vs. Petronas Chemicals Group | Omesti Bhd vs. Tenaga Nasional Bhd |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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