Correlation Between Erawan and Krungdhep Sophon
Can any of the company-specific risk be diversified away by investing in both Erawan and Krungdhep Sophon 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 Krungdhep Sophon 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 Krungdhep Sophon Public, you can compare the effects of market volatilities on Erawan and Krungdhep Sophon 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 Krungdhep Sophon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Krungdhep Sophon.
Diversification Opportunities for Erawan and Krungdhep Sophon
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Erawan and Krungdhep is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Krungdhep Sophon Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krungdhep Sophon 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 Krungdhep Sophon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krungdhep Sophon Public has no effect on the direction of Erawan i.e., Erawan and Krungdhep Sophon go up and down completely randomly.
Pair Corralation between Erawan and Krungdhep Sophon
Assuming the 90 days trading horizon The Erawan Group is expected to generate 0.51 times more return on investment than Krungdhep Sophon. However, The Erawan Group is 1.97 times less risky than Krungdhep Sophon. It trades about 0.11 of its potential returns per unit of risk. Krungdhep Sophon Public is currently generating about -0.1 per unit of risk. If you would invest 384.00 in The Erawan Group on August 31, 2024 and sell it today you would earn a total of 18.00 from holding The Erawan Group or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. Krungdhep Sophon Public
Performance |
| Timeline |
| Erawan Group |
| Krungdhep Sophon Public |
Erawan and Krungdhep Sophon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Krungdhep Sophon
The main advantage of trading using opposite Erawan and Krungdhep Sophon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Krungdhep Sophon 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 Krungdhep Sophon will offset losses from the drop in Krungdhep Sophon's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| Krungdhep Sophon vs. Thonburi Medical Centre | Krungdhep Sophon vs. Kang Yong Electric | Krungdhep Sophon vs. Jack Chia Industries | Krungdhep Sophon vs. Laguna Resorts Hotels |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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