Correlation Between Erawan and Prime Office
Can any of the company-specific risk be diversified away by investing in both Erawan and Prime Office 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 Prime Office 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 Prime Office Leasehold, you can compare the effects of market volatilities on Erawan and Prime Office 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 Prime Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Prime Office.
Diversification Opportunities for Erawan and Prime Office
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Erawan and Prime is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Prime Office Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Office 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 Prime Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Office Leasehold has no effect on the direction of Erawan i.e., Erawan and Prime Office go up and down completely randomly.
Pair Corralation between Erawan and Prime Office
Assuming the 90 days trading horizon The Erawan Group is expected to generate 2.75 times more return on investment than Prime Office. However, Erawan is 2.75 times more volatile than Prime Office Leasehold. It trades about 0.01 of its potential returns per unit of risk. Prime Office Leasehold is currently generating about 0.0 per unit of risk. If you would invest 392.00 in The Erawan Group on September 15, 2024 and sell it today you would earn a total of 0.00 from holding The Erawan Group or generate 0.0% 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. Prime Office Leasehold
Performance |
| Timeline |
| Erawan Group |
| Prime Office Leasehold |
Erawan and Prime Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Prime Office
The main advantage of trading using opposite Erawan and Prime Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Prime Office 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 Prime Office will offset losses from the drop in Prime Office's long position.| Erawan vs. Hwa Fong Rubber | Erawan vs. AAPICO Hitech Public | Erawan vs. Haad Thip Public | Erawan vs. Italian Thai Development 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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