Correlation Between Autocorp Holding and Erawan
Can any of the company-specific risk be diversified away by investing in both Autocorp Holding and Erawan 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 Autocorp Holding and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autocorp Holding Public and The Erawan Group, you can compare the effects of market volatilities on Autocorp Holding and Erawan 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 Autocorp Holding with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autocorp Holding and Erawan.
Diversification Opportunities for Autocorp Holding and Erawan
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Autocorp and Erawan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Autocorp Holding Public and The Erawan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erawan Group and Autocorp Holding 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 Autocorp Holding Public are associated (or correlated) with Erawan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erawan Group has no effect on the direction of Autocorp Holding i.e., Autocorp Holding and Erawan go up and down completely randomly.
Pair Corralation between Autocorp Holding and Erawan
Assuming the 90 days trading horizon Autocorp Holding Public is expected to under-perform the Erawan. But the stock apears to be less risky and, when comparing its historical volatility, Autocorp Holding Public is 1.2 times less risky than Erawan. The stock trades about -0.28 of its potential returns per unit of risk. The The Erawan Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 392.00 in The Erawan Group on August 24, 2024 and sell it today you would earn a total of 24.00 from holding The Erawan Group or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autocorp Holding Public vs. The Erawan Group
Performance |
| Timeline |
| Autocorp Holding Public |
| Erawan Group |
Autocorp Holding and Erawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autocorp Holding and Erawan
The main advantage of trading using opposite Autocorp Holding and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autocorp Holding position performs unexpectedly, Erawan 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 Erawan will offset losses from the drop in Erawan's long position.| Autocorp Holding vs. Amanah Leasing Public | Autocorp Holding vs. Asia Fiber Public | Autocorp Holding vs. Ingress Industrial Public | Autocorp Holding vs. Ekarat Engineering 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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