Correlation Between Lohakit Metal and S Khonkaen
Can any of the company-specific risk be diversified away by investing in both Lohakit Metal and S Khonkaen 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 Lohakit Metal and S Khonkaen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lohakit Metal Public and S Khonkaen Foods, you can compare the effects of market volatilities on Lohakit Metal and S Khonkaen 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 Lohakit Metal with a short position of S Khonkaen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohakit Metal and S Khonkaen.
Diversification Opportunities for Lohakit Metal and S Khonkaen
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lohakit and SORKON is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lohakit Metal Public and S Khonkaen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S Khonkaen Foods and Lohakit Metal 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 Lohakit Metal Public are associated (or correlated) with S Khonkaen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S Khonkaen Foods has no effect on the direction of Lohakit Metal i.e., Lohakit Metal and S Khonkaen go up and down completely randomly.
Pair Corralation between Lohakit Metal and S Khonkaen
Assuming the 90 days trading horizon Lohakit Metal Public is expected to generate 1.06 times more return on investment than S Khonkaen. However, Lohakit Metal is 1.06 times more volatile than S Khonkaen Foods. It trades about -0.1 of its potential returns per unit of risk. S Khonkaen Foods is currently generating about -0.12 per unit of risk. If you would invest 388.00 in Lohakit Metal Public on September 15, 2024 and sell it today you would lose (18.00) from holding Lohakit Metal Public or give up 4.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lohakit Metal Public vs. S Khonkaen Foods
Performance |
Timeline |
Lohakit Metal Public |
S Khonkaen Foods |
Lohakit Metal and S Khonkaen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lohakit Metal and S Khonkaen
The main advantage of trading using opposite Lohakit Metal and S Khonkaen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohakit Metal position performs unexpectedly, S Khonkaen 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 S Khonkaen will offset losses from the drop in S Khonkaen's long position.Lohakit Metal vs. Tata Steel Public | ||
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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