Correlation Between Erawan and Nawarat Patanakarn
Can any of the company-specific risk be diversified away by investing in both Erawan and Nawarat Patanakarn 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 Nawarat Patanakarn 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 Nawarat Patanakarn Public, you can compare the effects of market volatilities on Erawan and Nawarat Patanakarn 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 Nawarat Patanakarn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Nawarat Patanakarn.
Diversification Opportunities for Erawan and Nawarat Patanakarn
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Erawan and Nawarat is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Nawarat Patanakarn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nawarat Patanakarn 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 Nawarat Patanakarn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nawarat Patanakarn Public has no effect on the direction of Erawan i.e., Erawan and Nawarat Patanakarn go up and down completely randomly.
Pair Corralation between Erawan and Nawarat Patanakarn
Assuming the 90 days trading horizon The Erawan Group is expected to generate 0.58 times more return on investment than Nawarat Patanakarn. However, The Erawan Group is 1.72 times less risky than Nawarat Patanakarn. It trades about 0.13 of its potential returns per unit of risk. Nawarat Patanakarn Public is currently generating about -0.44 per unit of risk. If you would invest 382.00 in The Erawan Group on August 28, 2024 and sell it today you would earn a total of 22.00 from holding The Erawan Group or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. Nawarat Patanakarn Public
Performance |
| Timeline |
| Erawan Group |
| Nawarat Patanakarn Public |
Erawan and Nawarat Patanakarn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Nawarat Patanakarn
The main advantage of trading using opposite Erawan and Nawarat Patanakarn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Nawarat Patanakarn 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 Nawarat Patanakarn will offset losses from the drop in Nawarat Patanakarn's long position.| Erawan vs. SCB X Public | Erawan vs. Kasikornbank Public | Erawan vs. PTT Public | Erawan vs. Kasikornbank Public |
| Nawarat Patanakarn vs. Tata Steel Public | Nawarat Patanakarn vs. Thaifoods Group Public | Nawarat Patanakarn vs. TMT Steel Public | Nawarat Patanakarn 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |