Correlation Between SE Education and Ekarat Engineering
Can any of the company-specific risk be diversified away by investing in both SE Education 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 SE Education and Ekarat Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SE Education Public and Ekarat Engineering Public, you can compare the effects of market volatilities on SE Education 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 SE Education with a short position of Ekarat Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of SE Education and Ekarat Engineering.
Diversification Opportunities for SE Education and Ekarat Engineering
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SE-ED and Ekarat is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SE Education 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 SE Education 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 SE Education 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 SE Education i.e., SE Education and Ekarat Engineering go up and down completely randomly.
Pair Corralation between SE Education and Ekarat Engineering
Assuming the 90 days trading horizon SE Education Public is expected to under-perform the Ekarat Engineering. But the stock apears to be less risky and, when comparing its historical volatility, SE Education Public is 1.06 times less risky than Ekarat Engineering. The stock trades about -0.08 of its potential returns per unit of risk. The Ekarat Engineering Public is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 91.00 in Ekarat Engineering Public on September 5, 2024 and sell it today you would earn a total of 5.00 from holding Ekarat Engineering Public or generate 5.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.65% |
Values | Daily Returns |
SE Education Public vs. Ekarat Engineering Public
Performance |
Timeline |
SE Education Public |
Ekarat Engineering Public |
SE Education and Ekarat Engineering Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SE Education and Ekarat Engineering
The main advantage of trading using opposite SE Education and Ekarat Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SE Education 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.SE Education vs. SRI TRANG GLOVES | SE Education vs. AEON Thana Sinsap | SE Education vs. Asian Alliance International | SE Education vs. Sikarin Public |
Ekarat Engineering vs. Teka Construction PCL | Ekarat Engineering vs. AJ Advance Technology | Ekarat Engineering vs. CHUWIT FARM PUBLIC | Ekarat Engineering vs. SE Education 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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