Correlation Between Teka Construction and Ekarat Engineering
Can any of the company-specific risk be diversified away by investing in both Teka Construction 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 Teka Construction and Ekarat Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teka Construction PCL and Ekarat Engineering Public, you can compare the effects of market volatilities on Teka Construction 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 Teka Construction with a short position of Ekarat Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teka Construction and Ekarat Engineering.
Diversification Opportunities for Teka Construction and Ekarat Engineering
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Teka and Ekarat is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Teka Construction PCL 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 Teka Construction 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 Teka Construction PCL 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 Teka Construction i.e., Teka Construction and Ekarat Engineering go up and down completely randomly.
Pair Corralation between Teka Construction and Ekarat Engineering
Assuming the 90 days trading horizon Teka Construction PCL is expected to under-perform the Ekarat Engineering. In addition to that, Teka Construction is 1.53 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 0.05 per unit of volatility. If you would invest 93.00 in Ekarat Engineering Public on September 7, 2024 and sell it today you would earn a total of 3.00 from holding Ekarat Engineering Public or generate 3.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
Teka Construction PCL vs. Ekarat Engineering Public
Performance |
Timeline |
Teka Construction PCL |
Ekarat Engineering Public |
Teka Construction and Ekarat Engineering Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Teka Construction and Ekarat Engineering
The main advantage of trading using opposite Teka Construction and Ekarat Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teka Construction 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.Teka Construction vs. Sabuy Technology Public | Teka Construction vs. Takuni Group Public | Teka Construction vs. Ngern Tid Lor | Teka Construction vs. SVI 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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