Correlation Between Erawan and Ally Leasehold
Can any of the company-specific risk be diversified away by investing in both Erawan and Ally Leasehold 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 Ally Leasehold 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 Ally Leasehold Real, you can compare the effects of market volatilities on Erawan and Ally Leasehold 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 Ally Leasehold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Ally Leasehold.
Diversification Opportunities for Erawan and Ally Leasehold
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Erawan and Ally is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Ally Leasehold Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Leasehold Real 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 Ally Leasehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Leasehold Real has no effect on the direction of Erawan i.e., Erawan and Ally Leasehold go up and down completely randomly.
Pair Corralation between Erawan and Ally Leasehold
Assuming the 90 days trading horizon The Erawan Group is expected to generate 35.63 times more return on investment than Ally Leasehold. However, Erawan is 35.63 times more volatile than Ally Leasehold Real. It trades about 0.04 of its potential returns per unit of risk. Ally Leasehold Real is currently generating about -0.01 per unit of risk. If you would invest 441.00 in The Erawan Group on September 14, 2024 and sell it today you would lose (41.00) from holding The Erawan Group or give up 9.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. Ally Leasehold Real
Performance |
| Timeline |
| Erawan Group |
| Ally Leasehold Real |
Erawan and Ally Leasehold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Ally Leasehold
The main advantage of trading using opposite Erawan and Ally Leasehold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Ally Leasehold 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 Ally Leasehold will offset losses from the drop in Ally Leasehold's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| Ally Leasehold vs. AIM Industrial Growth | Ally Leasehold vs. CPN Retail Growth | Ally Leasehold vs. The Erawan Group | Ally Leasehold vs. Jay Mart 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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