Correlation Between TCM Public and Ekarat Engineering
Can any of the company-specific risk be diversified away by investing in both TCM Public and Ekarat Engineering 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 TCM Public and Ekarat Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TCM Public and Ekarat Engineering Public, you can compare the effects of market volatilities on TCM Public and Ekarat Engineering 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 TCM Public with a short position of Ekarat Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCM Public and Ekarat Engineering.
Diversification Opportunities for TCM Public and Ekarat Engineering
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TCM and Ekarat is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding TCM Public and Ekarat Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekarat Engineering Public and TCM Public 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 TCM Public are associated (or correlated) with Ekarat Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekarat Engineering Public has no effect on the direction of TCM Public i.e., TCM Public and Ekarat Engineering go up and down completely randomly.
Pair Corralation between TCM Public and Ekarat Engineering
Assuming the 90 days trading horizon TCM Public is expected to generate 1.11 times less return on investment than Ekarat Engineering. In addition to that, TCM Public is 1.0 times more volatile than Ekarat Engineering Public. It trades about 0.04 of its total potential returns per unit of risk. Ekarat Engineering Public is currently generating about 0.04 per unit of volatility. If you would invest 79.00 in Ekarat Engineering Public on September 3, 2024 and sell it today you would earn a total of 13.00 from holding Ekarat Engineering Public or generate 16.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TCM Public vs. Ekarat Engineering Public
Performance |
| Timeline |
| TCM Public |
| Ekarat Engineering Public |
TCM Public and Ekarat Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TCM Public and Ekarat Engineering
The main advantage of trading using opposite TCM Public and Ekarat Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCM Public position performs unexpectedly, Ekarat Engineering 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 Ekarat Engineering will offset losses from the drop in Ekarat Engineering's long position.| TCM Public vs. STPI Public | TCM Public vs. Thai Vegetable Oil | TCM Public vs. Tycoons Worldwide Group | TCM Public vs. Ratchthani Leasing 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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