Correlation Between Erawan and AddTech Hub
Can any of the company-specific risk be diversified away by investing in both Erawan and AddTech Hub 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 Erawan and AddTech Hub into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Erawan Group and AddTech Hub Public, you can compare the effects of market volatilities on Erawan and AddTech Hub 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 Erawan with a short position of AddTech Hub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and AddTech Hub.
Diversification Opportunities for Erawan and AddTech Hub
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Erawan and AddTech is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and AddTech Hub Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AddTech Hub Public and Erawan 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 The Erawan Group are associated (or correlated) with AddTech Hub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AddTech Hub Public has no effect on the direction of Erawan i.e., Erawan and AddTech Hub go up and down completely randomly.
Pair Corralation between Erawan and AddTech Hub
Assuming the 90 days trading horizon The Erawan Group is expected to generate 44.67 times more return on investment than AddTech Hub. However, Erawan is 44.67 times more volatile than AddTech Hub Public. It trades about 0.08 of its potential returns per unit of risk. AddTech Hub Public is currently generating about 0.01 per unit of risk. If you would invest 458.00 in The Erawan Group on September 1, 2024 and sell it today you would lose (58.00) from holding The Erawan Group or give up 12.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. AddTech Hub Public
Performance |
| Timeline |
| Erawan Group |
| AddTech Hub Public |
Erawan and AddTech Hub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and AddTech Hub
The main advantage of trading using opposite Erawan and AddTech Hub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, AddTech Hub 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 AddTech Hub will offset losses from the drop in AddTech Hub's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| AddTech Hub vs. Forth Public | AddTech Hub vs. II Group Public | AddTech Hub vs. After You Public | AddTech Hub vs. Applicad 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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