Correlation Between Eastern Technical and Thantawan Industry
Can any of the company-specific risk be diversified away by investing in both Eastern Technical and Thantawan Industry 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 Thantawan Industry 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 Thantawan Industry Public, you can compare the effects of market volatilities on Eastern Technical and Thantawan Industry 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 Thantawan Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Technical and Thantawan Industry.
Diversification Opportunities for Eastern Technical and Thantawan Industry
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastern and Thantawan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Technical Engineering and Thantawan Industry Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thantawan Industry Public 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 Thantawan Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thantawan Industry Public has no effect on the direction of Eastern Technical i.e., Eastern Technical and Thantawan Industry go up and down completely randomly.
Pair Corralation between Eastern Technical and Thantawan Industry
Assuming the 90 days trading horizon Eastern Technical Engineering is expected to generate 44.18 times more return on investment than Thantawan Industry. However, Eastern Technical is 44.18 times more volatile than Thantawan Industry Public. It trades about 0.05 of its potential returns per unit of risk. Thantawan Industry Public is currently generating about 0.03 per unit of risk. If you would invest 108.00 in Eastern Technical Engineering on September 12, 2024 and sell it today you would lose (18.00) from holding Eastern Technical Engineering or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Technical Engineering vs. Thantawan Industry Public
Performance |
| Timeline |
| Eastern Technical |
| Thantawan Industry Public |
Eastern Technical and Thantawan Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Technical and Thantawan Industry
The main advantage of trading using opposite Eastern Technical and Thantawan Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Technical position performs unexpectedly, Thantawan Industry 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 Thantawan Industry will offset losses from the drop in Thantawan Industry's long position.| Eastern Technical vs. G Capital Public | Eastern Technical vs. Fortune Parts Industry | Eastern Technical vs. Hydrotek Public | Eastern Technical vs. Ama Marine Public |
| Thantawan Industry vs. The Erawan Group | Thantawan Industry vs. Jay Mart Public | Thantawan Industry vs. Airports of Thailand | Thantawan Industry vs. Eastern Technical Engineering |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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