Correlation Between Central Retail and Erawan
Can any of the company-specific risk be diversified away by investing in both Central Retail 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 Central Retail and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Retail and The Erawan Group, you can compare the effects of market volatilities on Central Retail 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 Central Retail with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Retail and Erawan.
Diversification Opportunities for Central Retail and Erawan
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Central and Erawan is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Central Retail and The Erawan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erawan Group and Central Retail 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 Central Retail 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 Central Retail i.e., Central Retail and Erawan go up and down completely randomly.
Pair Corralation between Central Retail and Erawan
Assuming the 90 days trading horizon Central Retail is expected to generate 1.01 times more return on investment than Erawan. However, Central Retail is 1.01 times more volatile than The Erawan Group. It trades about 0.19 of its potential returns per unit of risk. The Erawan Group is currently generating about 0.11 per unit of risk. If you would invest 3,125 in Central Retail on August 30, 2024 and sell it today you would earn a total of 275.00 from holding Central Retail or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Retail vs. The Erawan Group
Performance |
| Timeline |
| Central Retail |
| Erawan Group |
Central Retail and Erawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Retail and Erawan
The main advantage of trading using opposite Central Retail and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Retail 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.| Central Retail vs. SCG PACKAGING PCL NVDR | Central Retail vs. CK Power Public | Central Retail vs. Thai Metal Drum | Central Retail vs. Country Group Holdings |
| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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