Correlation Between East Coast and Chewathai Public
Can any of the company-specific risk be diversified away by investing in both East Coast and Chewathai Public 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 Chewathai Public 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 Chewathai Public, you can compare the effects of market volatilities on East Coast and Chewathai Public 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 Chewathai Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Coast and Chewathai Public.
Diversification Opportunities for East Coast and Chewathai Public
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between East and Chewathai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding East Coast Furnitech and Chewathai Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chewathai 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 Chewathai Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chewathai Public has no effect on the direction of East Coast i.e., East Coast and Chewathai Public go up and down completely randomly.
Pair Corralation between East Coast and Chewathai Public
Assuming the 90 days trading horizon East Coast Furnitech is expected to generate 0.57 times more return on investment than Chewathai Public. However, East Coast Furnitech is 1.77 times less risky than Chewathai Public. It trades about -0.2 of its potential returns per unit of risk. Chewathai Public is currently generating about -0.16 per unit of risk. If you would invest 49.00 in East Coast Furnitech on September 1, 2024 and sell it today you would lose (6.00) from holding East Coast Furnitech or give up 12.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
East Coast Furnitech vs. Chewathai Public
Performance |
| Timeline |
| East Coast Furnitech |
| Chewathai Public |
East Coast and Chewathai Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Coast and Chewathai Public
The main advantage of trading using opposite East Coast and Chewathai Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Coast position performs unexpectedly, Chewathai Public 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 Chewathai Public will offset losses from the drop in Chewathai Public'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 |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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