Correlation Between Eastern Star and Everland Public
Can any of the company-specific risk be diversified away by investing in both Eastern Star and Everland 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 Eastern Star and Everland Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Star Real and Everland Public, you can compare the effects of market volatilities on Eastern Star and Everland 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 Eastern Star with a short position of Everland Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Star and Everland Public.
Diversification Opportunities for Eastern Star and Everland Public
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eastern and Everland is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Star Real and Everland Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everland Public and Eastern Star 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 Eastern Star Real are associated (or correlated) with Everland Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everland Public has no effect on the direction of Eastern Star i.e., Eastern Star and Everland Public go up and down completely randomly.
Pair Corralation between Eastern Star and Everland Public
Assuming the 90 days trading horizon Eastern Star Real is expected to generate 1.0 times more return on investment than Everland Public. However, Eastern Star Real is 1.0 times less risky than Everland Public. It trades about 0.04 of its potential returns per unit of risk. Everland Public is currently generating about 0.04 per unit of risk. If you would invest 32.00 in Eastern Star Real on August 31, 2024 and sell it today you would lose (9.00) from holding Eastern Star Real or give up 28.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Eastern Star Real vs. Everland Public
Performance |
| Timeline |
| Eastern Star Real |
| Everland Public |
Eastern Star and Everland Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Star and Everland Public
The main advantage of trading using opposite Eastern Star and Everland Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Star position performs unexpectedly, Everland 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 Everland Public will offset losses from the drop in Everland Public's long position.| Eastern Star vs. Bangkok Land Public | Eastern Star vs. Everland Public | Eastern Star vs. Amata Public | Eastern Star vs. Chonburi Concrete Product |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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