Correlation Between Dcon Products and Erawan
Can any of the company-specific risk be diversified away by investing in both Dcon Products 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 Dcon Products and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dcon Products Public and The Erawan Group, you can compare the effects of market volatilities on Dcon Products 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 Dcon Products with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dcon Products and Erawan.
Diversification Opportunities for Dcon Products and Erawan
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dcon and Erawan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dcon Products 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 Dcon Products 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 Dcon Products 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 Dcon Products i.e., Dcon Products and Erawan go up and down completely randomly.
Pair Corralation between Dcon Products and Erawan
Assuming the 90 days trading horizon Dcon Products Public is expected to generate 0.72 times more return on investment than Erawan. However, Dcon Products Public is 1.39 times less risky than Erawan. It trades about 0.01 of its potential returns per unit of risk. The Erawan Group is currently generating about -0.21 per unit of risk. If you would invest 29.00 in Dcon Products Public on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Dcon Products Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dcon Products Public vs. The Erawan Group
Performance |
| Timeline |
| Dcon Products Public |
| Erawan Group |
Dcon Products and Erawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dcon Products and Erawan
The main advantage of trading using opposite Dcon Products and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dcon Products 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.| Dcon Products vs. Asia Metal Public | Dcon Products vs. Chonburi Concrete Product | Dcon Products vs. Asia Plus Group | Dcon Products vs. CSP Steel Center |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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