Correlation Between Erawan and Thachang Green
Can any of the company-specific risk be diversified away by investing in both Erawan and Thachang Green 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 Thachang Green 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 Thachang Green Energy, you can compare the effects of market volatilities on Erawan and Thachang Green 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 Thachang Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Thachang Green.
Diversification Opportunities for Erawan and Thachang Green
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Erawan and Thachang is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Thachang Green Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thachang Green Energy 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 Thachang Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thachang Green Energy has no effect on the direction of Erawan i.e., Erawan and Thachang Green go up and down completely randomly.
Pair Corralation between Erawan and Thachang Green
Assuming the 90 days trading horizon The Erawan Group is expected to under-perform the Thachang Green. In addition to that, Erawan is 1.66 times more volatile than Thachang Green Energy. It trades about -0.21 of its total potential returns per unit of risk. Thachang Green Energy is currently generating about -0.14 per unit of volatility. If you would invest 230.00 in Thachang Green Energy on October 9, 2024 and sell it today you would lose (10.00) from holding Thachang Green Energy or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. Thachang Green Energy
Performance |
| Timeline |
| Erawan Group |
| Thachang Green Energy |
Erawan and Thachang Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Thachang Green
The main advantage of trading using opposite Erawan and Thachang Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Thachang Green 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 Thachang Green will offset losses from the drop in Thachang Green's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| Thachang Green vs. TKS Technologies Public | Thachang Green vs. Susco Public | Thachang Green vs. Gulf Energy Development | Thachang Green 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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