Correlation Between Lohakit Metal and SCB X

Can any of the company-specific risk be diversified away by investing in both Lohakit Metal 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 Lohakit Metal and SCB X 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 SCB X Public, you can compare the effects of market volatilities on Lohakit Metal 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 Lohakit Metal with a short position of SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohakit Metal and SCB X.

Diversification Opportunities for Lohakit Metal and SCB X

-0.62

Correlation Coefficient

Lohakit Metal  SCB X

Excellent diversification

The 3 months correlation between Lohakit and SCB is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lohakit Metal 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 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 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 Lohakit Metal i.e., Lohakit Metal and SCB X go up and down completely randomly.

Pair Corralation between Lohakit Metal and SCB X

Assuming the 90 days trading horizon Lohakit Metal Public is expected to under-perform the SCB X. But the stock apears to be less risky and, when comparing its historical volatility, Lohakit Metal Public is 1.94 times less risky than SCB X. The stock trades about -0.36 of its potential returns per unit of risk. The SCB X Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  11,750  in SCB X Public on December 29, 2024 and sell it today you would earn a total of  800.00  from holding SCB X Public or generate 6.81% return on investment over 90 days.

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

Lohakit Metal Public  vs.  SCB X Public

Lohakit Metal Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lohakit Metal Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

SCB X Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCB X Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, SCB X may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Lohakit Metal and SCB X

The main advantage of trading using opposite Lohakit Metal and SCB X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohakit Metal 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 Lohakit Metal 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.