Correlation Between Eastern Technical and Electricity Generating
Can any of the company-specific risk be diversified away by investing in both Eastern Technical and Electricity Generating 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 Technical and Electricity Generating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Technical Engineering and Electricity Generating Public, you can compare the effects of market volatilities on Eastern Technical and Electricity Generating 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 Technical with a short position of Electricity Generating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Technical and Electricity Generating.
Diversification Opportunities for Eastern Technical and Electricity Generating
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastern and Electricity is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Technical Engineering and Electricity Generating Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electricity Generating and Eastern Technical 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 Technical Engineering are associated (or correlated) with Electricity Generating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electricity Generating has no effect on the direction of Eastern Technical i.e., Eastern Technical and Electricity Generating go up and down completely randomly.
Pair Corralation between Eastern Technical and Electricity Generating
Assuming the 90 days trading horizon Eastern Technical Engineering is expected to generate 1.78 times more return on investment than Electricity Generating. However, Eastern Technical is 1.78 times more volatile than Electricity Generating Public. It trades about 0.04 of its potential returns per unit of risk. Electricity Generating Public is currently generating about -0.03 per unit of risk. If you would invest 86.00 in Eastern Technical Engineering on November 2, 2024 and sell it today you would earn a total of 1.00 from holding Eastern Technical Engineering or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Technical Engineering vs. Electricity Generating Public
Performance |
| Timeline |
| Eastern Technical |
| Electricity Generating |
Eastern Technical and Electricity Generating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Technical and Electricity Generating
The main advantage of trading using opposite Eastern Technical and Electricity Generating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Technical position performs unexpectedly, Electricity Generating 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 Electricity Generating will offset losses from the drop in Electricity Generating's long position.| Eastern Technical vs. Srinanaporn Marketing Public | Eastern Technical vs. Thaifoods Group Public | Eastern Technical vs. GFPT Public | Eastern Technical vs. The Erawan Group |
| Electricity Generating vs. The Siam Cement | Electricity Generating vs. CP ALL Public | Electricity Generating vs. Intouch Holdings Public | Electricity Generating vs. PTT 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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