Correlation Between Erawan and Teka Construction
Can any of the company-specific risk be diversified away by investing in both Erawan and Teka Construction 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 Teka Construction 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 Teka Construction PCL, you can compare the effects of market volatilities on Erawan and Teka Construction 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 Teka Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Teka Construction.
Diversification Opportunities for Erawan and Teka Construction
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Erawan and Teka is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Teka Construction PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teka Construction PCL 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 Teka Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teka Construction PCL has no effect on the direction of Erawan i.e., Erawan and Teka Construction go up and down completely randomly.
Pair Corralation between Erawan and Teka Construction
Assuming the 90 days trading horizon The Erawan Group is expected to generate 0.93 times more return on investment than Teka Construction. However, The Erawan Group is 1.08 times less risky than Teka Construction. It trades about 0.09 of its potential returns per unit of risk. Teka Construction PCL is currently generating about 0.01 per unit of risk. If you would invest 388.00 in The Erawan Group on September 14, 2024 and sell it today you would earn a total of 12.00 from holding The Erawan Group or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
The Erawan Group vs. Teka Construction PCL
Performance |
| Timeline |
| Erawan Group |
| Teka Construction PCL |
Erawan and Teka Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Teka Construction
The main advantage of trading using opposite Erawan and Teka Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Teka Construction 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 Teka Construction will offset losses from the drop in Teka Construction's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| Teka Construction vs. Sabuy Technology Public | Teka Construction vs. Takuni Group Public | Teka Construction vs. SVI Public | Teka Construction 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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