Correlation Between East Coast and ATP 30
Can any of the company-specific risk be diversified away by investing in both East Coast and ATP 30 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 East Coast and ATP 30 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Coast Furnitech and ATP 30 Public, you can compare the effects of market volatilities on East Coast and ATP 30 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 East Coast with a short position of ATP 30. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Coast and ATP 30.
Diversification Opportunities for East Coast and ATP 30
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between East and ATP is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding East Coast Furnitech and ATP 30 Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATP 30 Public and East Coast 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 East Coast Furnitech are associated (or correlated) with ATP 30. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATP 30 Public has no effect on the direction of East Coast i.e., East Coast and ATP 30 go up and down completely randomly.
Pair Corralation between East Coast and ATP 30
Assuming the 90 days trading horizon East Coast Furnitech is expected to under-perform the ATP 30. In addition to that, East Coast is 1.38 times more volatile than ATP 30 Public. It trades about -0.17 of its total potential returns per unit of risk. ATP 30 Public is currently generating about 0.13 per unit of volatility. If you would invest 93.00 in ATP 30 Public on September 2, 2024 and sell it today you would earn a total of 5.00 from holding ATP 30 Public or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Coast Furnitech vs. ATP 30 Public
Performance |
| Timeline |
| East Coast Furnitech |
| ATP 30 Public |
East Coast and ATP 30 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Coast and ATP 30
The main advantage of trading using opposite East Coast and ATP 30 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Coast position performs unexpectedly, ATP 30 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 ATP 30 will offset losses from the drop in ATP 30's long position.| East Coast vs. G Capital Public | East Coast vs. Filter Vision Public | East Coast vs. Chewathai Public | East Coast vs. The Erawan Group |
| ATP 30 vs. Dynasty Ceramic Public | ATP 30 vs. Filter Vision Public | ATP 30 vs. East Coast Furnitech | ATP 30 vs. Asia Green Energy |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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