Correlation Between Tycoons Worldwide and Erawan

Can any of the company-specific risk be diversified away by investing in both Tycoons Worldwide and Erawan 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 Tycoons Worldwide and Erawan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tycoons Worldwide Group and The Erawan Group, you can compare the effects of market volatilities on Tycoons Worldwide and Erawan 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 Tycoons Worldwide with a short position of Erawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tycoons Worldwide and Erawan.

Diversification Opportunities for Tycoons Worldwide and Erawan

0.41

Correlation Coefficient

Tycoons Worldwide  Erawan

Very weak diversification

The 3 months correlation between Tycoons and Erawan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tycoons Worldwide Group and The Erawan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erawan Group and Tycoons Worldwide 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 Tycoons Worldwide Group are associated (or correlated) with Erawan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erawan Group has no effect on the direction of Tycoons Worldwide i.e., Tycoons Worldwide and Erawan go up and down completely randomly.

Pair Corralation between Tycoons Worldwide and Erawan

Assuming the 90 days trading horizon Tycoons Worldwide Group is expected to under-perform the Erawan. But the stock apears to be less risky and, when comparing its historical volatility, Tycoons Worldwide Group is 2.2 times less risky than Erawan. The stock trades about -0.19 of its potential returns per unit of risk. The The Erawan Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  394.00  in The Erawan Group on September 17, 2024 and sell it today you would lose (2.00) from holding The Erawan Group or give up 0.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Tycoons Worldwide Group  vs.  The Erawan Group

Tycoons Worldwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tycoons Worldwide Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Erawan Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Erawan Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Erawan is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Tycoons Worldwide and Erawan

The main advantage of trading using opposite Tycoons Worldwide and Erawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tycoons Worldwide position performs unexpectedly, Erawan 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 Erawan will offset losses from the drop in Erawan's long position.

The idea behind Tycoons Worldwide Group and The Erawan Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.