Correlation Between Erawan and Ama Marine
Can any of the company-specific risk be diversified away by investing in both Erawan and Ama Marine 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 Ama Marine 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 Ama Marine Public, you can compare the effects of market volatilities on Erawan and Ama Marine 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 Ama Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Ama Marine.
Diversification Opportunities for Erawan and Ama Marine
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Erawan and Ama is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Ama Marine Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ama Marine 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 Ama Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ama Marine Public has no effect on the direction of Erawan i.e., Erawan and Ama Marine go up and down completely randomly.
Pair Corralation between Erawan and Ama Marine
Assuming the 90 days trading horizon The Erawan Group is expected to under-perform the Ama Marine. In addition to that, Erawan is 2.42 times more volatile than Ama Marine Public. It trades about -0.1 of its total potential returns per unit of risk. Ama Marine Public is currently generating about 0.16 per unit of volatility. If you would invest 416.00 in Ama Marine Public on November 27, 2024 and sell it today you would earn a total of 10.00 from holding Ama Marine Public or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. Ama Marine Public
Performance |
| Timeline |
| Erawan Group |
| Ama Marine Public |
Erawan and Ama Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Ama Marine
The main advantage of trading using opposite Erawan and Ama Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Ama Marine 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 Ama Marine will offset losses from the drop in Ama Marine's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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