Correlation Between Eastern Commercial and Chonburi Concrete
Can any of the company-specific risk be diversified away by investing in both Eastern Commercial and Chonburi Concrete 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 Eastern Commercial and Chonburi Concrete into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Commercial Leasing and Chonburi Concrete Product, you can compare the effects of market volatilities on Eastern Commercial and Chonburi Concrete 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 Eastern Commercial with a short position of Chonburi Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Commercial and Chonburi Concrete.
Diversification Opportunities for Eastern Commercial and Chonburi Concrete
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eastern and Chonburi is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Commercial Leasing and Chonburi Concrete Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chonburi Concrete Product and Eastern Commercial 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 Eastern Commercial Leasing are associated (or correlated) with Chonburi Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chonburi Concrete Product has no effect on the direction of Eastern Commercial i.e., Eastern Commercial and Chonburi Concrete go up and down completely randomly.
Pair Corralation between Eastern Commercial and Chonburi Concrete
Assuming the 90 days trading horizon Eastern Commercial Leasing is expected to generate 1.14 times more return on investment than Chonburi Concrete. However, Eastern Commercial is 1.14 times more volatile than Chonburi Concrete Product. It trades about -0.05 of its potential returns per unit of risk. Chonburi Concrete Product is currently generating about -0.07 per unit of risk. If you would invest 100.00 in Eastern Commercial Leasing on August 25, 2024 and sell it today you would lose (3.00) from holding Eastern Commercial Leasing or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Commercial Leasing vs. Chonburi Concrete Product
Performance |
| Timeline |
| Eastern Commercial |
| Chonburi Concrete Product |
Eastern Commercial and Chonburi Concrete Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Commercial and Chonburi Concrete
The main advantage of trading using opposite Eastern Commercial and Chonburi Concrete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Commercial position performs unexpectedly, Chonburi Concrete 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 Chonburi Concrete will offset losses from the drop in Chonburi Concrete's long position.| Eastern Commercial vs. Chai Watana Tannery | Eastern Commercial vs. EMC Public | Eastern Commercial vs. Asia Plus Group | Eastern Commercial vs. Globlex Holding Management |
| Chonburi Concrete vs. PTT Public | Chonburi Concrete vs. PTT Exploration and | Chonburi Concrete vs. The Siam Cement | Chonburi Concrete 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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