Correlation Between Grande Asset and Erawan
Can any of the company-specific risk be diversified away by investing in both Grande Asset and Erawan 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 Grande Asset and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grande Asset Hotels and The Erawan Group, you can compare the effects of market volatilities on Grande Asset and Erawan 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 Grande Asset with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Asset and Erawan.
Diversification Opportunities for Grande Asset and Erawan
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grande and Erawan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Grande Asset Hotels and The Erawan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erawan Group and Grande Asset 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 Grande Asset Hotels are associated (or correlated) with Erawan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erawan Group has no effect on the direction of Grande Asset i.e., Grande Asset and Erawan go up and down completely randomly.
Pair Corralation between Grande Asset and Erawan
Assuming the 90 days trading horizon Grande Asset Hotels is expected to under-perform the Erawan. In addition to that, Grande Asset is 3.9 times more volatile than The Erawan Group. It trades about -0.1 of its total potential returns per unit of risk. The Erawan Group is currently generating about -0.05 per unit of volatility. If you would invest 410.00 in The Erawan Group on September 2, 2024 and sell it today you would lose (10.00) from holding The Erawan Group or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grande Asset Hotels vs. The Erawan Group
Performance |
| Timeline |
| Grande Asset Hotels |
| Erawan Group |
Grande Asset and Erawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Asset and Erawan
The main advantage of trading using opposite Grande Asset and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Asset position performs unexpectedly, Erawan 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 Erawan will offset losses from the drop in Erawan's long position.| Grande Asset vs. Turnkey Communication Services | Grande Asset vs. Digital Telecommunications Infrastructure | Grande Asset vs. Lohakit Metal Public | Grande Asset vs. CPR Gomu Industrial |
| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |