Correlation Between Interlink Communication and Erawan
Can any of the company-specific risk be diversified away by investing in both Interlink Communication 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 Interlink Communication and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interlink Communication Public and The Erawan Group, you can compare the effects of market volatilities on Interlink Communication 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 Interlink Communication with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlink Communication and Erawan.
Diversification Opportunities for Interlink Communication and Erawan
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Interlink and Erawan is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Interlink Communication Public and The Erawan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erawan Group and Interlink Communication 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 Interlink Communication Public 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 Interlink Communication i.e., Interlink Communication and Erawan go up and down completely randomly.
Pair Corralation between Interlink Communication and Erawan
Assuming the 90 days trading horizon Interlink Communication Public is expected to under-perform the Erawan. In addition to that, Interlink Communication is 1.11 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interlink Communication Public vs. The Erawan Group
Performance |
| Timeline |
| Interlink Communication |
| Erawan Group |
Interlink Communication and Erawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interlink Communication and Erawan
The main advantage of trading using opposite Interlink Communication and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interlink Communication 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.| Interlink Communication vs. AP Public | Interlink Communication vs. Jasmine International Public | Interlink Communication vs. Asia Plus Group | Interlink Communication vs. Bangchak Public |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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