Correlation Between Eastern Technical and Namyong Terminal
Can any of the company-specific risk be diversified away by investing in both Eastern Technical and Namyong Terminal 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 Namyong Terminal 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 Namyong Terminal PCL, you can compare the effects of market volatilities on Eastern Technical and Namyong Terminal 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 Namyong Terminal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Technical and Namyong Terminal.
Diversification Opportunities for Eastern Technical and Namyong Terminal
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eastern and Namyong is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Technical Engineering and Namyong Terminal PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyong Terminal PCL 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 Namyong Terminal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyong Terminal PCL has no effect on the direction of Eastern Technical i.e., Eastern Technical and Namyong Terminal go up and down completely randomly.
Pair Corralation between Eastern Technical and Namyong Terminal
Assuming the 90 days trading horizon Eastern Technical Engineering is expected to generate 67.97 times more return on investment than Namyong Terminal. However, Eastern Technical is 67.97 times more volatile than Namyong Terminal PCL. It trades about 0.1 of its potential returns per unit of risk. Namyong Terminal PCL is currently generating about 0.02 per unit of risk. If you would invest 0.00 in Eastern Technical Engineering on November 2, 2024 and sell it today you would earn a total of 87.00 from holding Eastern Technical Engineering or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Technical Engineering vs. Namyong Terminal PCL
Performance |
| Timeline |
| Eastern Technical |
| Namyong Terminal PCL |
Eastern Technical and Namyong Terminal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Technical and Namyong Terminal
The main advantage of trading using opposite Eastern Technical and Namyong Terminal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Technical position performs unexpectedly, Namyong Terminal 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 Namyong Terminal will offset losses from the drop in Namyong Terminal'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 |
| Namyong Terminal vs. Plan B Media | Namyong Terminal vs. Major Cineplex Group | Namyong Terminal vs. Precious Shipping Public | Namyong Terminal vs. Somboon Advance Technology |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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