Correlation Between Lalin Property and SCB X

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

By analyzing existing cross correlation between Lalin Property Public and SCB X Public, you can compare the effects of market volatilities on Lalin Property and SCB X 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 Lalin Property with a short position of SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lalin Property and SCB X.

Diversification Opportunities for Lalin Property and SCB X

-0.82

Correlation Coefficient

Lalin Property  SCB X

Pay attention - limited upside

The 3 months correlation between Lalin and SCB is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lalin Property Public and SCB X Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCB X Public and Lalin Property 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 Lalin Property Public are associated (or correlated) with SCB X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCB X Public has no effect on the direction of Lalin Property i.e., Lalin Property and SCB X go up and down completely randomly.

Pair Corralation between Lalin Property and SCB X

Assuming the 90 days trading horizon Lalin Property Public is expected to under-perform the SCB X. But the stock apears to be less risky and, when comparing its historical volatility, Lalin Property Public is 1.34 times less risky than SCB X. The stock trades about -0.33 of its potential returns per unit of risk. The SCB X Public is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  12,600  in SCB X Public on December 4, 2024 and sell it today you would lose (300.00) from holding SCB X Public or give up 2.38% of portfolio value over 90 days.

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

Lalin Property Public  vs.  SCB X Public

Lalin Property Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lalin Property Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SCB X Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCB X Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, SCB X is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Lalin Property and SCB X

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

The idea behind Lalin Property Public and SCB X Public 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 Commodity Directory module to find actively traded commodities issued by global exchanges.