Correlation Between Moong Pattana and Erawan
Can any of the company-specific risk be diversified away by investing in both Moong Pattana 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 Moong Pattana and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moong Pattana International and The Erawan Group, you can compare the effects of market volatilities on Moong Pattana 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 Moong Pattana with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moong Pattana and Erawan.
Diversification Opportunities for Moong Pattana and Erawan
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Moong and Erawan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Moong Pattana International and The Erawan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erawan Group and Moong Pattana 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 Moong Pattana International 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 Moong Pattana i.e., Moong Pattana and Erawan go up and down completely randomly.
Pair Corralation between Moong Pattana and Erawan
Assuming the 90 days trading horizon Moong Pattana International is expected to generate 1.0 times more return on investment than Erawan. However, Moong Pattana International is 1.0 times less risky than Erawan. It trades about 0.07 of its potential returns per unit of risk. The Erawan Group is currently generating about 0.07 per unit of risk. If you would invest 207.00 in Moong Pattana International on September 1, 2024 and sell it today you would earn a total of 7.00 from holding Moong Pattana International or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.45% |
| Values | Daily Returns |
Moong Pattana International vs. The Erawan Group
Performance |
| Timeline |
| Moong Pattana Intern |
| Erawan Group |
Moong Pattana and Erawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moong Pattana and Erawan
The main advantage of trading using opposite Moong Pattana and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moong Pattana 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.| Moong Pattana vs. Metro Systems | Moong Pattana vs. Mega Lifesciences Public | Moong Pattana vs. Hana Microelectronics Public | Moong Pattana vs. Karmarts 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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