Correlation Between MCOT Public and Eastern Technical
Can any of the company-specific risk be diversified away by investing in both MCOT Public and Eastern Technical 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 MCOT Public and Eastern Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCOT Public and Eastern Technical Engineering, you can compare the effects of market volatilities on MCOT Public and Eastern Technical 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 MCOT Public with a short position of Eastern Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCOT Public and Eastern Technical.
Diversification Opportunities for MCOT Public and Eastern Technical
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MCOT and Eastern is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding MCOT Public and Eastern Technical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Technical and MCOT Public 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 MCOT Public are associated (or correlated) with Eastern Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Technical has no effect on the direction of MCOT Public i.e., MCOT Public and Eastern Technical go up and down completely randomly.
Pair Corralation between MCOT Public and Eastern Technical
Assuming the 90 days trading horizon MCOT Public is expected to generate 11.77 times less return on investment than Eastern Technical. But when comparing it to its historical volatility, MCOT Public is 10.8 times less risky than Eastern Technical. It trades about 0.09 of its potential returns per unit of risk. Eastern Technical Engineering is currently generating about 0.1 of returns per unit of risk over similar time horizon. 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 | Weak |
| Accuracy | 99.02% |
| Values | Daily Returns |
MCOT Public vs. Eastern Technical Engineering
Performance |
| Timeline |
| MCOT Public |
| Eastern Technical |
MCOT Public and Eastern Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCOT Public and Eastern Technical
The main advantage of trading using opposite MCOT Public and Eastern Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCOT Public position performs unexpectedly, Eastern Technical 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 Eastern Technical will offset losses from the drop in Eastern Technical's long position.| MCOT Public vs. Bangkok Chain Hospital | MCOT Public vs. Jay Mart Public | MCOT Public vs. Energy Absolute Public | MCOT Public vs. Delta Electronics Public |
| Eastern Technical vs. Srinanaporn Marketing Public | Eastern Technical vs. Thaifoods Group Public | Eastern Technical vs. GFPT Public | Eastern Technical vs. The Erawan Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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