Correlation Between LH Shopping and Thailand Prime

Can any of the company-specific risk be diversified away by investing in both LH Shopping and Thailand Prime 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 LH Shopping and Thailand Prime into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LH Shopping Centers and Thailand Prime Property, you can compare the effects of market volatilities on LH Shopping and Thailand Prime 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 LH Shopping with a short position of Thailand Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of LH Shopping and Thailand Prime.

Diversification Opportunities for LH Shopping and Thailand Prime

0.47

Correlation Coefficient

LH Shopping  Thailand Prime

Very weak diversification

The 3 months correlation between LHSC and Thailand is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding LH Shopping Centers and Thailand Prime Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thailand Prime Property and LH Shopping 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 LH Shopping Centers are associated (or correlated) with Thailand Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thailand Prime Property has no effect on the direction of LH Shopping i.e., LH Shopping and Thailand Prime go up and down completely randomly.

Pair Corralation between LH Shopping and Thailand Prime

Assuming the 90 days trading horizon LH Shopping Centers is expected to generate 0.96 times more return on investment than Thailand Prime. However, LH Shopping Centers is 1.04 times less risky than Thailand Prime. It trades about 0.04 of its potential returns per unit of risk. Thailand Prime Property is currently generating about 0.01 per unit of risk. If you would invest  924.00  in LH Shopping Centers on September 26, 2024 and sell it today you would earn a total of  196.00  from holding LH Shopping Centers or generate 21.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

LH Shopping Centers  vs.  Thailand Prime Property

LH Shopping Centers

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LH Shopping Centers are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, LH Shopping is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Thailand Prime Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thailand Prime Property has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Thailand Prime is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LH Shopping and Thailand Prime

The main advantage of trading using opposite LH Shopping and Thailand Prime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LH Shopping position performs unexpectedly, Thailand Prime 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 Thailand Prime will offset losses from the drop in Thailand Prime's long position.

The idea behind LH Shopping Centers and Thailand Prime Property pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.