Correlation Between Eureka Design and SPCG Public
Can any of the company-specific risk be diversified away by investing in both Eureka Design and SPCG Public 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 SPCG Public 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 SPCG Public, you can compare the effects of market volatilities on Eureka Design and SPCG Public 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 SPCG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eureka Design and SPCG Public.
Diversification Opportunities for Eureka Design and SPCG Public
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eureka and SPCG is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eureka Design Public and SPCG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPCG 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 SPCG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPCG Public has no effect on the direction of Eureka Design i.e., Eureka Design and SPCG Public go up and down completely randomly.
Pair Corralation between Eureka Design and SPCG Public
Assuming the 90 days trading horizon Eureka Design Public is expected to generate 1.83 times more return on investment than SPCG Public. However, Eureka Design is 1.83 times more volatile than SPCG Public. It trades about 0.24 of its potential returns per unit of risk. SPCG Public is currently generating about -0.1 per unit of risk. If you would invest 48.00 in Eureka Design Public on August 29, 2024 and sell it today you would earn a total of 7.00 from holding Eureka Design Public or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eureka Design Public vs. SPCG Public
Performance |
| Timeline |
| Eureka Design Public |
| SPCG Public |
Eureka Design and SPCG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eureka Design and SPCG Public
The main advantage of trading using opposite Eureka Design and SPCG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eureka Design position performs unexpectedly, SPCG Public 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 SPCG Public will offset losses from the drop in SPCG Public's long position.| Eureka Design vs. Quality Houses Hotel | Eureka Design vs. Quality Houses Property | Eureka Design vs. CK Power Public | Eureka Design vs. Thai Metal Drum |
| SPCG Public vs. BCPG Public | SPCG Public vs. TPI Polene Power | SPCG Public vs. BTS Group Holdings | SPCG Public vs. Energy Absolute 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |