Correlation Between Sabuy Technology and Erawan
Can any of the company-specific risk be diversified away by investing in both Sabuy Technology 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 Sabuy Technology and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabuy Technology Public and The Erawan Group, you can compare the effects of market volatilities on Sabuy Technology 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 Sabuy Technology with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabuy Technology and Erawan.
Diversification Opportunities for Sabuy Technology and Erawan
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sabuy and Erawan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sabuy Technology 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 Sabuy Technology 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 Sabuy Technology 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 Sabuy Technology i.e., Sabuy Technology and Erawan go up and down completely randomly.
Pair Corralation between Sabuy Technology and Erawan
Assuming the 90 days trading horizon Sabuy Technology is expected to generate 1.35 times less return on investment than Erawan. In addition to that, Sabuy Technology is 1.01 times more volatile than The Erawan Group. It trades about 0.03 of its total potential returns per unit of risk. The Erawan Group is currently generating about 0.04 per unit of volatility. If you would invest 449.00 in The Erawan Group on August 25, 2024 and sell it today you would lose (37.00) from holding The Erawan Group or give up 8.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabuy Technology Public vs. The Erawan Group
Performance |
| Timeline |
| Sabuy Technology Public |
| Erawan Group |
Sabuy Technology and Erawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabuy Technology and Erawan
The main advantage of trading using opposite Sabuy Technology and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabuy Technology 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.| Sabuy Technology vs. Kulthorn Kirby Public | Sabuy Technology vs. The Erawan Group | Sabuy Technology vs. Airports of Thailand | Sabuy Technology vs. Eastern Technical Engineering |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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