Correlation Between SRI TRANG and Eastern Technical
Can any of the company-specific risk be diversified away by investing in both SRI TRANG and Eastern Technical 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 SRI TRANG and Eastern Technical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SRI TRANG GLOVES and Eastern Technical Engineering, you can compare the effects of market volatilities on SRI TRANG and Eastern Technical 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 SRI TRANG with a short position of Eastern Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SRI TRANG and Eastern Technical.
Diversification Opportunities for SRI TRANG and Eastern Technical
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SRI and Eastern is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding SRI TRANG GLOVES and Eastern Technical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Technical and SRI TRANG 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 SRI TRANG GLOVES are associated (or correlated) with Eastern Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Technical has no effect on the direction of SRI TRANG i.e., SRI TRANG and Eastern Technical go up and down completely randomly.
Pair Corralation between SRI TRANG and Eastern Technical
Assuming the 90 days trading horizon SRI TRANG GLOVES is expected to under-perform the Eastern Technical. In addition to that, SRI TRANG is 1.33 times more volatile than Eastern Technical Engineering. It trades about -0.18 of its total potential returns per unit of risk. Eastern Technical Engineering is currently generating about -0.02 per unit of volatility. If you would invest 82.00 in Eastern Technical Engineering on October 21, 2024 and sell it today you would lose (1.00) from holding Eastern Technical Engineering or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SRI TRANG GLOVES vs. Eastern Technical Engineering
Performance |
| Timeline |
| SRI TRANG GLOVES |
| Eastern Technical |
SRI TRANG and Eastern Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SRI TRANG and Eastern Technical
The main advantage of trading using opposite SRI TRANG and Eastern Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SRI TRANG position performs unexpectedly, Eastern Technical 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 Eastern Technical will offset losses from the drop in Eastern Technical's long position.| SRI TRANG vs. Unimit Engineering Public | SRI TRANG vs. Winner Group Enterprise | SRI TRANG vs. Union Petrochemical Public | SRI TRANG vs. Thai Mitsuwa Public |
| Eastern Technical vs. G Capital Public | Eastern Technical vs. Harn Engineering Solutions | Eastern Technical vs. Fortune Parts Industry | Eastern Technical vs. Hydrotek 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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