Correlation Between Sriracha Construction and Erawan
Can any of the company-specific risk be diversified away by investing in both Sriracha Construction 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 Sriracha Construction and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sriracha Construction Public and The Erawan Group, you can compare the effects of market volatilities on Sriracha Construction 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 Sriracha Construction with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sriracha Construction and Erawan.
Diversification Opportunities for Sriracha Construction and Erawan
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sriracha and Erawan is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sriracha Construction 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 Sriracha Construction 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 Sriracha Construction 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 Sriracha Construction i.e., Sriracha Construction and Erawan go up and down completely randomly.
Pair Corralation between Sriracha Construction and Erawan
Assuming the 90 days trading horizon Sriracha Construction Public is expected to under-perform the Erawan. In addition to that, Sriracha Construction is 1.12 times more volatile than The Erawan Group. It trades about -0.34 of its total potential returns per unit of risk. The Erawan Group is currently generating about -0.11 per unit of volatility. If you would invest 448.00 in The Erawan Group on August 29, 2024 and sell it today you would lose (44.00) from holding The Erawan Group or give up 9.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sriracha Construction Public vs. The Erawan Group
Performance |
| Timeline |
| Sriracha Construction |
| Erawan Group |
Sriracha Construction and Erawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sriracha Construction and Erawan
The main advantage of trading using opposite Sriracha Construction and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sriracha Construction 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.| Sriracha Construction vs. MCS Steel Public | Sriracha Construction vs. Asia Plus Group | Sriracha Construction vs. Lalin Property Public | Sriracha Construction vs. Lam Soon Public |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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