Correlation Between Erawan and LH Hotel
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By analyzing existing cross correlation between The Erawan Group and LH Hotel Leasehold, you can compare the effects of market volatilities on Erawan and LH Hotel 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 LH Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and LH Hotel.
Diversification Opportunities for Erawan and LH Hotel
Very weak diversification
The 3 months correlation between Erawan and LHHOTEL is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and LH Hotel Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LH Hotel Leasehold 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 LH Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LH Hotel Leasehold has no effect on the direction of Erawan i.e., Erawan and LH Hotel go up and down completely randomly.
Pair Corralation between Erawan and LH Hotel
Assuming the 90 days trading horizon The Erawan Group is expected to generate 1.69 times more return on investment than LH Hotel. However, Erawan is 1.69 times more volatile than LH Hotel Leasehold. It trades about 0.11 of its potential returns per unit of risk. LH Hotel Leasehold is currently generating about 0.09 per unit of risk. If you would invest 392.00 in The Erawan Group on August 25, 2024 and sell it today you would earn a total of 20.00 from holding The Erawan Group or generate 5.1% 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. LH Hotel Leasehold
Performance |
| Timeline |
| Erawan Group |
| LH Hotel Leasehold |
Erawan and LH Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and LH Hotel
The main advantage of trading using opposite Erawan and LH Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, LH Hotel 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 LH Hotel will offset losses from the drop in LH Hotel'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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