Correlation Between Erawan and CK Power
Can any of the company-specific risk be diversified away by investing in both Erawan and CK Power 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 CK Power 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 CK Power Public, you can compare the effects of market volatilities on Erawan and CK Power 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 CK Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and CK Power.
Diversification Opportunities for Erawan and CK Power
Average diversification
The 3 months correlation between Erawan and CKP is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and CK Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Power 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 CK Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Power Public has no effect on the direction of Erawan i.e., Erawan and CK Power go up and down completely randomly.
Pair Corralation between Erawan and CK Power
Assuming the 90 days trading horizon The Erawan Group is expected to generate 24.82 times more return on investment than CK Power. However, Erawan is 24.82 times more volatile than CK Power Public. It trades about 0.04 of its potential returns per unit of risk. CK Power Public is currently generating about -0.03 per unit of risk. If you would invest 441.00 in The Erawan Group on September 4, 2024 and sell it today you would lose (45.00) from holding The Erawan Group or give up 10.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. CK Power Public
Performance |
| Timeline |
| Erawan Group |
| CK Power Public |
Erawan and CK Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and CK Power
The main advantage of trading using opposite Erawan and CK Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, CK Power 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 CK Power will offset losses from the drop in CK Power's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| CK Power vs. Energy Absolute Public | CK Power vs. BCPG Public | CK Power vs. Bangkok Expressway and | CK Power vs. Gulf Energy Development |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |