Correlation Between Erawan and Synnex Public
Can any of the company-specific risk be diversified away by investing in both Erawan and Synnex Public 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 Synnex Public 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 Synnex Public, you can compare the effects of market volatilities on Erawan and Synnex Public 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 Synnex Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Synnex Public.
Diversification Opportunities for Erawan and Synnex Public
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Erawan and Synnex is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Synnex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synnex 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 Synnex Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synnex Public has no effect on the direction of Erawan i.e., Erawan and Synnex Public go up and down completely randomly.
Pair Corralation between Erawan and Synnex Public
Assuming the 90 days trading horizon The Erawan Group is expected to under-perform the Synnex Public. But the stock apears to be less risky and, when comparing its historical volatility, The Erawan Group is 1.08 times less risky than Synnex Public. The stock trades about -0.21 of its potential returns per unit of risk. The Synnex Public is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,440 in Synnex Public on October 20, 2024 and sell it today you would lose (130.00) from holding Synnex Public or give up 9.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. Synnex Public
Performance |
| Timeline |
| Erawan Group |
| Synnex Public |
Erawan and Synnex Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Synnex Public
The main advantage of trading using opposite Erawan and Synnex Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Synnex Public 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 Synnex Public will offset losses from the drop in Synnex Public's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| Synnex Public vs. Com7 PCL | Synnex Public vs. Jay Mart Public | Synnex Public vs. SiS Distribution Public | Synnex Public vs. KCE Electronics Public |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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