Correlation Between Ratch Group and Electricity Generating
Can any of the company-specific risk be diversified away by investing in both Ratch Group and Electricity Generating 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 Ratch Group and Electricity Generating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ratch Group Public and Electricity Generating Public, you can compare the effects of market volatilities on Ratch Group and Electricity Generating 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 Ratch Group with a short position of Electricity Generating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ratch Group and Electricity Generating.
Diversification Opportunities for Ratch Group and Electricity Generating
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ratch and Electricity is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ratch Group Public and Electricity Generating Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electricity Generating and Ratch Group 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 Ratch Group Public are associated (or correlated) with Electricity Generating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electricity Generating has no effect on the direction of Ratch Group i.e., Ratch Group and Electricity Generating go up and down completely randomly.
Pair Corralation between Ratch Group and Electricity Generating
Assuming the 90 days trading horizon Ratch Group Public is expected to generate 0.96 times more return on investment than Electricity Generating. However, Ratch Group Public is 1.04 times less risky than Electricity Generating. It trades about -0.03 of its potential returns per unit of risk. Electricity Generating Public is currently generating about -0.04 per unit of risk. If you would invest 3,542 in Ratch Group Public on November 27, 2024 and sell it today you would lose (792.00) from holding Ratch Group Public or give up 22.36% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ratch Group Public vs. Electricity Generating Public
Performance |
Timeline |
Ratch Group Public |
Electricity Generating |
Ratch Group and Electricity Generating Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ratch Group and Electricity Generating
The main advantage of trading using opposite Ratch Group and Electricity Generating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ratch Group position performs unexpectedly, Electricity Generating 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 Electricity Generating will offset losses from the drop in Electricity Generating's long position.Ratch Group vs. Electricity Generating Public | Ratch Group vs. PTT Public | Ratch Group vs. Advanced Info Service | Ratch Group vs. The Siam Cement |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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