Correlation Between Amanah Leasing and Eastern Commercial
Can any of the company-specific risk be diversified away by investing in both Amanah Leasing and Eastern Commercial 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 Amanah Leasing and Eastern Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amanah Leasing Public and Eastern Commercial Leasing, you can compare the effects of market volatilities on Amanah Leasing and Eastern Commercial 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 Amanah Leasing with a short position of Eastern Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amanah Leasing and Eastern Commercial.
Diversification Opportunities for Amanah Leasing and Eastern Commercial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amanah and Eastern is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Amanah Leasing Public and Eastern Commercial Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Commercial and Amanah Leasing 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 Amanah Leasing Public are associated (or correlated) with Eastern Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Commercial has no effect on the direction of Amanah Leasing i.e., Amanah Leasing and Eastern Commercial go up and down completely randomly.
Pair Corralation between Amanah Leasing and Eastern Commercial
Assuming the 90 days trading horizon Amanah Leasing Public is expected to under-perform the Eastern Commercial. In addition to that, Amanah Leasing is 1.34 times more volatile than Eastern Commercial Leasing. It trades about -0.5 of its total potential returns per unit of risk. Eastern Commercial Leasing is currently generating about -0.23 per unit of volatility. If you would invest 106.00 in Eastern Commercial Leasing on August 27, 2024 and sell it today you would lose (9.00) from holding Eastern Commercial Leasing or give up 8.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amanah Leasing Public vs. Eastern Commercial Leasing
Performance |
| Timeline |
| Amanah Leasing Public |
| Eastern Commercial |
Amanah Leasing and Eastern Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amanah Leasing and Eastern Commercial
The main advantage of trading using opposite Amanah Leasing and Eastern Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amanah Leasing position performs unexpectedly, Eastern Commercial 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 Eastern Commercial will offset losses from the drop in Eastern Commercial's long position.| Amanah Leasing vs. Thai Energy Storage | Amanah Leasing vs. Royal Orchid Hotel | Amanah Leasing vs. Grand Canal Land | Amanah Leasing vs. PRG Public |
| Eastern Commercial vs. Chai Watana Tannery | Eastern Commercial vs. EMC Public | Eastern Commercial vs. Asia Plus Group | Eastern Commercial vs. Globlex Holding Management |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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