Correlation Between Erawan and Thaicom Public
Can any of the company-specific risk be diversified away by investing in both Erawan and Thaicom 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 Thaicom 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 Thaicom Public, you can compare the effects of market volatilities on Erawan and Thaicom 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 Thaicom Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Thaicom Public.
Diversification Opportunities for Erawan and Thaicom Public
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Erawan and Thaicom is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Thaicom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaicom 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 Thaicom Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaicom Public has no effect on the direction of Erawan i.e., Erawan and Thaicom Public go up and down completely randomly.
Pair Corralation between Erawan and Thaicom Public
Assuming the 90 days trading horizon Erawan is expected to generate 1.03 times less return on investment than Thaicom Public. But when comparing it to its historical volatility, The Erawan Group is 1.0 times less risky than Thaicom Public. It trades about 0.04 of its potential returns per unit of risk. Thaicom Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,271 in Thaicom Public on September 12, 2024 and sell it today you would earn a total of 169.00 from holding Thaicom Public or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. Thaicom Public
Performance |
| Timeline |
| Erawan Group |
| Thaicom Public |
Erawan and Thaicom Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Thaicom Public
The main advantage of trading using opposite Erawan and Thaicom Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Thaicom 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 Thaicom Public will offset losses from the drop in Thaicom Public's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| Thaicom Public vs. Synnex Public | Thaicom Public vs. SVI Public | Thaicom Public vs. Interlink Communication Public | Thaicom Public 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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