Correlation Between Ekarat Engineering and Asia Aviation
Can any of the company-specific risk be diversified away by investing in both Ekarat Engineering and Asia Aviation 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 Ekarat Engineering and Asia Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ekarat Engineering Public and Asia Aviation Public, you can compare the effects of market volatilities on Ekarat Engineering and Asia Aviation 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 Ekarat Engineering with a short position of Asia Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekarat Engineering and Asia Aviation.
Diversification Opportunities for Ekarat Engineering and Asia Aviation
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ekarat and Asia is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ekarat Engineering Public and Asia Aviation Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Aviation Public and Ekarat Engineering 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 Ekarat Engineering Public are associated (or correlated) with Asia Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Aviation Public has no effect on the direction of Ekarat Engineering i.e., Ekarat Engineering and Asia Aviation go up and down completely randomly.
Pair Corralation between Ekarat Engineering and Asia Aviation
Assuming the 90 days trading horizon Ekarat Engineering is expected to generate 1.02 times less return on investment than Asia Aviation. But when comparing it to its historical volatility, Ekarat Engineering Public is 1.0 times less risky than Asia Aviation. It trades about 0.06 of its potential returns per unit of risk. Asia Aviation Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 194.00 in Asia Aviation Public on September 4, 2024 and sell it today you would earn a total of 92.00 from holding Asia Aviation Public or generate 47.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ekarat Engineering Public vs. Asia Aviation Public
Performance |
| Timeline |
| Ekarat Engineering Public |
| Asia Aviation Public |
Ekarat Engineering and Asia Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ekarat Engineering and Asia Aviation
The main advantage of trading using opposite Ekarat Engineering and Asia Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekarat Engineering position performs unexpectedly, Asia Aviation 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 Asia Aviation will offset losses from the drop in Asia Aviation's long position.| Ekarat Engineering vs. Asia Aviation Public | Ekarat Engineering vs. Bangkok Dusit Medical | Ekarat Engineering vs. Bangkok Expressway and | Ekarat Engineering vs. Airports of Thailand |
| Asia Aviation vs. Airports of Thailand | Asia Aviation vs. Bangkok Expressway and | Asia Aviation vs. BTS Group Holdings | Asia Aviation vs. Bangkok Airways Public |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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