Correlation Between Erawan and Mena Transport
Can any of the company-specific risk be diversified away by investing in both Erawan and Mena Transport 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 Mena Transport 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 Mena Transport Public, you can compare the effects of market volatilities on Erawan and Mena Transport 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 Mena Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Mena Transport.
Diversification Opportunities for Erawan and Mena Transport
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Erawan and Mena is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Mena Transport Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mena Transport 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 Mena Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mena Transport Public has no effect on the direction of Erawan i.e., Erawan and Mena Transport go up and down completely randomly.
Pair Corralation between Erawan and Mena Transport
Assuming the 90 days trading horizon The Erawan Group is expected to generate 25.3 times more return on investment than Mena Transport. However, Erawan is 25.3 times more volatile than Mena Transport Public. It trades about 0.07 of its potential returns per unit of risk. Mena Transport Public is currently generating about -0.07 per unit of risk. If you would invest 482.00 in The Erawan Group on September 3, 2024 and sell it today you would lose (82.00) from holding The Erawan Group or give up 17.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. Mena Transport Public
Performance |
| Timeline |
| Erawan Group |
| Mena Transport Public |
Erawan and Mena Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Mena Transport
The main advantage of trading using opposite Erawan and Mena Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Mena Transport 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 Mena Transport will offset losses from the drop in Mena Transport's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| Mena Transport vs. Mono Next Public | Mena Transport vs. Triple i Logistics | Mena Transport vs. Dynasty Ceramic Public | Mena Transport vs. The Erawan Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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