Correlation Between SPACE and Lai Sun

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

By analyzing existing cross correlation between SPACE and Lai Sun Development, you can compare the effects of market volatilities on SPACE and Lai Sun 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 SPACE with a short position of Lai Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPACE and Lai Sun.

Diversification Opportunities for SPACE and Lai Sun

0.26

Correlation Coefficient

SPACE  Lai Sun

Modest diversification

The 3 months correlation between SPACE and Lai is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Lai Sun Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lai Sun Development and SPACE 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 SPACE are associated (or correlated) with Lai Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lai Sun Development has no effect on the direction of SPACE i.e., SPACE and Lai Sun go up and down completely randomly.

Pair Corralation between SPACE and Lai Sun

Assuming the 90 days horizon SPACE is expected to generate 0.91 times more return on investment than Lai Sun. However, SPACE is 1.1 times less risky than Lai Sun. It trades about -0.12 of its potential returns per unit of risk. Lai Sun Development is currently generating about -0.13 per unit of risk. If you would invest  45.00  in SPACE on December 20, 2024 and sell it today you would lose (20.00) from holding SPACE or give up 44.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

SPACE  vs.  Lai Sun Development

SPACE

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPACE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for SPACE shareholders.

Lai Sun Development

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lai Sun Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SPACE and Lai Sun

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

The idea behind SPACE and Lai Sun Development 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.