Correlation Between Erawan and Haad Thip
Can any of the company-specific risk be diversified away by investing in both Erawan and Haad Thip 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 Haad Thip 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 Haad Thip Public, you can compare the effects of market volatilities on Erawan and Haad Thip 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 Haad Thip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Haad Thip.
Diversification Opportunities for Erawan and Haad Thip
Good diversification
The 3 months correlation between Erawan and Haad is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Haad Thip Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haad Thip 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 Haad Thip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haad Thip Public has no effect on the direction of Erawan i.e., Erawan and Haad Thip go up and down completely randomly.
Pair Corralation between Erawan and Haad Thip
Assuming the 90 days trading horizon The Erawan Group is expected to generate 1.31 times more return on investment than Haad Thip. However, Erawan is 1.31 times more volatile than Haad Thip Public. It trades about 0.14 of its potential returns per unit of risk. Haad Thip Public is currently generating about -0.06 per unit of risk. If you would invest 388.00 in The Erawan Group on September 13, 2024 and sell it today you would earn a total of 20.00 from holding The Erawan Group or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. Haad Thip Public
Performance |
| Timeline |
| Erawan Group |
| Haad Thip Public |
Erawan and Haad Thip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Haad Thip
The main advantage of trading using opposite Erawan and Haad Thip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Haad Thip 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 Haad Thip will offset losses from the drop in Haad Thip's long position.| Erawan vs. Hwa Fong Rubber | Erawan vs. AAPICO Hitech Public | Erawan vs. Haad Thip Public | Erawan vs. Italian Thai Development Public |
| Haad Thip vs. GFPT Public | Haad Thip vs. Dynasty Ceramic Public | Haad Thip vs. The Erawan Group | Haad Thip 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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