Correlation Between Erawan and AIM Industrial
Can any of the company-specific risk be diversified away by investing in both Erawan and AIM Industrial 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 AIM Industrial 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 AIM Industrial Growth, you can compare the effects of market volatilities on Erawan and AIM Industrial 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 AIM Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and AIM Industrial.
Diversification Opportunities for Erawan and AIM Industrial
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Erawan and AIM is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and AIM Industrial Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM Industrial Growth 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 AIM Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM Industrial Growth has no effect on the direction of Erawan i.e., Erawan and AIM Industrial go up and down completely randomly.
Pair Corralation between Erawan and AIM Industrial
Assuming the 90 days trading horizon The Erawan Group is expected to under-perform the AIM Industrial. In addition to that, Erawan is 3.67 times more volatile than AIM Industrial Growth. It trades about -0.27 of its total potential returns per unit of risk. AIM Industrial Growth is currently generating about 0.0 per unit of volatility. If you would invest 1,050 in AIM Industrial Growth on October 22, 2024 and sell it today you would earn a total of 0.00 from holding AIM Industrial Growth or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. AIM Industrial Growth
Performance |
| Timeline |
| Erawan Group |
| AIM Industrial Growth |
Erawan and AIM Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and AIM Industrial
The main advantage of trading using opposite Erawan and AIM Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, AIM Industrial 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 AIM Industrial will offset losses from the drop in AIM Industrial's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| AIM Industrial vs. Amata Summit Growth | AIM Industrial vs. WHA Premium Growth | AIM Industrial vs. Digital Telecommunications Infrastructure | AIM Industrial vs. Quality Houses Property |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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