Correlation Between Electricity Generating and Ratch Group
Can any of the company-specific risk be diversified away by investing in both Electricity Generating and Ratch Group 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 Electricity Generating and Ratch Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electricity Generating Public and Ratch Group Public, you can compare the effects of market volatilities on Electricity Generating and Ratch Group 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 Electricity Generating with a short position of Ratch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electricity Generating and Ratch Group.
Diversification Opportunities for Electricity Generating and Ratch Group
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Electricity and Ratch is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Electricity Generating Public and Ratch Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratch Group Public and Electricity Generating 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 Electricity Generating Public are associated (or correlated) with Ratch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratch Group Public has no effect on the direction of Electricity Generating i.e., Electricity Generating and Ratch Group go up and down completely randomly.
Pair Corralation between Electricity Generating and Ratch Group
Assuming the 90 days trading horizon Electricity Generating Public is expected to generate 0.81 times more return on investment than Ratch Group. However, Electricity Generating Public is 1.23 times less risky than Ratch Group. It trades about -0.02 of its potential returns per unit of risk. Ratch Group Public is currently generating about -0.1 per unit of risk. If you would invest 12,000 in Electricity Generating Public on August 29, 2024 and sell it today you would lose (100.00) from holding Electricity Generating Public or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electricity Generating Public vs. Ratch Group Public
Performance |
| Timeline |
| Electricity Generating |
| Ratch Group Public |
Electricity Generating and Ratch Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electricity Generating and Ratch Group
The main advantage of trading using opposite Electricity Generating and Ratch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electricity Generating position performs unexpectedly, Ratch Group 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 Ratch Group will offset losses from the drop in Ratch Group's long position.| Electricity Generating vs. PTT Public | Electricity Generating vs. The Siam Cement | Electricity Generating vs. Ratch Group Public | Electricity Generating vs. Bangkok Bank Public |
| Ratch Group vs. Electricity Generating Public | Ratch Group vs. PTT Public | Ratch Group vs. Advanced Info Service | Ratch Group vs. The Siam Cement |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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