Correlation Between Eureka Design and Indara Insurance
Can any of the company-specific risk be diversified away by investing in both Eureka Design and Indara Insurance 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 Indara Insurance 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 Indara Insurance Public, you can compare the effects of market volatilities on Eureka Design and Indara Insurance 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 Indara Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eureka Design and Indara Insurance.
Diversification Opportunities for Eureka Design and Indara Insurance
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eureka and Indara is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eureka Design Public and Indara Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indara Insurance Public 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 Indara Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indara Insurance Public has no effect on the direction of Eureka Design i.e., Eureka Design and Indara Insurance go up and down completely randomly.
Pair Corralation between Eureka Design and Indara Insurance
Assuming the 90 days trading horizon Eureka Design is expected to generate 33.35 times less return on investment than Indara Insurance. But when comparing it to its historical volatility, Eureka Design Public is 22.31 times less risky than Indara Insurance. It trades about 0.04 of its potential returns per unit of risk. Indara Insurance Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,200 in Indara Insurance Public on September 5, 2024 and sell it today you would lose (3,150) from holding Indara Insurance Public or give up 28.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Eureka Design Public vs. Indara Insurance Public
Performance |
| Timeline |
| Eureka Design Public |
| Indara Insurance Public |
Eureka Design and Indara Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eureka Design and Indara Insurance
The main advantage of trading using opposite Eureka Design and Indara Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eureka Design position performs unexpectedly, Indara Insurance 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 Indara Insurance will offset losses from the drop in Indara Insurance's long position.| Eureka Design vs. Union Petrochemical Public | Eureka Design vs. TV Thunder Public | Eureka Design vs. Exotic Food Public | Eureka Design vs. TWZ Public |
| Indara Insurance vs. IFS Capital Public | Indara Insurance vs. Internet Thailand Public | Indara Insurance vs. Hwa Fong Rubber | Indara Insurance vs. Haad Thip 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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