Correlation Between QTC Energy and Erawan
Can any of the company-specific risk be diversified away by investing in both QTC Energy 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 QTC Energy and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QTC Energy Public and The Erawan Group, you can compare the effects of market volatilities on QTC Energy 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 QTC Energy with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of QTC Energy and Erawan.
Diversification Opportunities for QTC Energy and Erawan
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QTC and Erawan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding QTC Energy 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 QTC Energy 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 QTC Energy 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 QTC Energy i.e., QTC Energy and Erawan go up and down completely randomly.
Pair Corralation between QTC Energy and Erawan
Assuming the 90 days trading horizon QTC Energy Public is expected to generate 1.0 times more return on investment than Erawan. However, QTC Energy Public is 1.0 times less risky than Erawan. It trades about 0.06 of its potential returns per unit of risk. The Erawan Group is currently generating about 0.06 per unit of risk. If you would invest 381.00 in QTC Energy Public on August 25, 2024 and sell it today you would lose (1.00) from holding QTC Energy Public or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
QTC Energy Public vs. The Erawan Group
Performance |
| Timeline |
| QTC Energy Public |
| Erawan Group |
QTC Energy and Erawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QTC Energy and Erawan
The main advantage of trading using opposite QTC Energy and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QTC Energy 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.| QTC Energy vs. Southern Concrete Pile | QTC Energy vs. Star Petroleum Refining | QTC Energy vs. Qualitech Public | QTC Energy vs. Quality Construction Products |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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