Correlation Between Eureka Design and Eastern Polymer
Can any of the company-specific risk be diversified away by investing in both Eureka Design and Eastern Polymer 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 Eureka Design and Eastern Polymer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eureka Design Public and Eastern Polymer Group, you can compare the effects of market volatilities on Eureka Design and Eastern Polymer 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 Eureka Design with a short position of Eastern Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eureka Design and Eastern Polymer.
Diversification Opportunities for Eureka Design and Eastern Polymer
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eureka and Eastern is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Eureka Design Public and Eastern Polymer Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Polymer Group and Eureka Design 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 Eureka Design Public are associated (or correlated) with Eastern Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Polymer Group has no effect on the direction of Eureka Design i.e., Eureka Design and Eastern Polymer go up and down completely randomly.
Pair Corralation between Eureka Design and Eastern Polymer
Assuming the 90 days trading horizon Eureka Design Public is expected to generate 2.6 times more return on investment than Eastern Polymer. However, Eureka Design is 2.6 times more volatile than Eastern Polymer Group. It trades about -0.04 of its potential returns per unit of risk. Eastern Polymer Group is currently generating about -0.14 per unit of risk. If you would invest 94.00 in Eureka Design Public on October 21, 2024 and sell it today you would lose (6.00) from holding Eureka Design Public or give up 6.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eureka Design Public vs. Eastern Polymer Group
Performance |
| Timeline |
| Eureka Design Public |
| Eastern Polymer Group |
Eureka Design and Eastern Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eureka Design and Eastern Polymer
The main advantage of trading using opposite Eureka Design and Eastern Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eureka Design position performs unexpectedly, Eastern Polymer 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 Polymer will offset losses from the drop in Eastern Polymer's long position.| Eureka Design vs. PTT Public | Eureka Design vs. Kasikornbank Public | Eureka Design vs. The Siam Cement | Eureka Design vs. OSOTSPA PCL NVDR |
| Eastern Polymer vs. AP Public | Eastern Polymer vs. CK Power Public | Eastern Polymer vs. Gunkul Engineering Public | Eastern Polymer vs. Indorama Ventures PCL |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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