Correlation Between Italian Thai and Erawan
Can any of the company-specific risk be diversified away by investing in both Italian Thai 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 Italian Thai and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Italian Thai Development Public and The Erawan Group, you can compare the effects of market volatilities on Italian Thai 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 Italian Thai with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Italian Thai and Erawan.
Diversification Opportunities for Italian Thai and Erawan
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Italian and Erawan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and The Erawan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erawan Group and Italian Thai 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 Italian Thai Development 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 Italian Thai i.e., Italian Thai and Erawan go up and down completely randomly.
Pair Corralation between Italian Thai and Erawan
Assuming the 90 days trading horizon Italian Thai Development Public is expected to under-perform the Erawan. In addition to that, Italian Thai is 1.33 times more volatile than The Erawan Group. It trades about -0.29 of its total potential returns per unit of risk. The Erawan Group is currently generating about -0.01 per unit of volatility. If you would invest 416.00 in The Erawan Group on September 13, 2024 and sell it today you would lose (8.00) from holding The Erawan Group or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Italian Thai Development Publi vs. The Erawan Group
Performance |
| Timeline |
| Italian Thai Develop |
| Erawan Group |
Italian Thai and Erawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Italian Thai and Erawan
The main advantage of trading using opposite Italian Thai and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Italian Thai 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.| Italian Thai vs. Land and Houses | Italian Thai vs. CH Karnchang Public | Italian Thai vs. Krung Thai Bank | Italian Thai vs. Bangkok Bank Public |
| Erawan vs. Hwa Fong Rubber | Erawan vs. AAPICO Hitech Public | Erawan vs. Haad Thip Public | Erawan vs. Italian Thai Development 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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