Correlation Between Erawan and Siri Prime

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Can any of the company-specific risk be diversified away by investing in both Erawan and Siri Prime 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 Siri Prime 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 Siri Prime Office, you can compare the effects of market volatilities on Erawan and Siri Prime 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 Siri Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Siri Prime.

Diversification Opportunities for Erawan and Siri Prime

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Erawan and Siri is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Siri Prime Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siri Prime Office 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 Siri Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siri Prime Office has no effect on the direction of Erawan i.e., Erawan and Siri Prime go up and down completely randomly.

Pair Corralation between Erawan and Siri Prime

Assuming the 90 days trading horizon Erawan is expected to generate 38.94 times less return on investment than Siri Prime. But when comparing it to its historical volatility, The Erawan Group is 6.06 times less risky than Siri Prime. It trades about 0.04 of its potential returns per unit of risk. Siri Prime Office is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  730.00  in Siri Prime Office on September 12, 2024 and sell it today you would lose (730.00) from holding Siri Prime Office or give up 100.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy71.31%
ValuesDaily Returns

The Erawan Group  vs.  Siri Prime Office

 Performance 
       Timeline  
Erawan Group 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in The Erawan Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Erawan is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.
Siri Prime Office 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Siri Prime Office are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Siri Prime sustained solid returns over the last few months and may actually be approaching a breakup point.

Erawan and Siri Prime Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Erawan and Siri Prime

The main advantage of trading using opposite Erawan and Siri Prime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Siri Prime 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 Siri Prime will offset losses from the drop in Siri Prime's long position.
The idea behind The Erawan Group and Siri Prime Office pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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..

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