Correlation Between Ekarat Engineering and Teka Construction
Can any of the company-specific risk be diversified away by investing in both Ekarat Engineering and Teka Construction 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 Teka Construction 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 Teka Construction PCL, you can compare the effects of market volatilities on Ekarat Engineering and Teka Construction 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 Teka Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekarat Engineering and Teka Construction.
Diversification Opportunities for Ekarat Engineering and Teka Construction
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ekarat and Teka is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ekarat Engineering Public and Teka Construction PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teka Construction PCL 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 Teka Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teka Construction PCL has no effect on the direction of Ekarat Engineering i.e., Ekarat Engineering and Teka Construction go up and down completely randomly.
Pair Corralation between Ekarat Engineering and Teka Construction
Assuming the 90 days trading horizon Ekarat Engineering Public is expected to generate 0.57 times more return on investment than Teka Construction. However, Ekarat Engineering Public is 1.76 times less risky than Teka Construction. It trades about 0.16 of its potential returns per unit of risk. Teka Construction PCL is currently generating about -0.15 per unit of risk. If you would invest 91.00 in Ekarat Engineering Public on September 5, 2024 and sell it today you would earn a total of 5.00 from holding Ekarat Engineering Public or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Ekarat Engineering Public vs. Teka Construction PCL
Performance |
| Timeline |
| Ekarat Engineering Public |
| Teka Construction PCL |
Ekarat Engineering and Teka Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ekarat Engineering and Teka Construction
The main advantage of trading using opposite Ekarat Engineering and Teka Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekarat Engineering position performs unexpectedly, Teka Construction 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 Teka Construction will offset losses from the drop in Teka Construction's long position.| Ekarat Engineering vs. Teka Construction PCL | Ekarat Engineering vs. AJ Advance Technology | Ekarat Engineering vs. CHUWIT FARM PUBLIC | Ekarat Engineering vs. SE Education 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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