Correlation Between Eureka Design and AEON Thana

Can any of the company-specific risk be diversified away by investing in both Eureka Design and AEON Thana 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 AEON Thana 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 AEON Thana Sinsap, you can compare the effects of market volatilities on Eureka Design and AEON Thana 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 AEON Thana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eureka Design and AEON Thana.

Diversification Opportunities for Eureka Design and AEON Thana

0.14

Correlation Coefficient

Eureka Design  AEON Thana

Average diversification

The 3 months correlation between Eureka and AEON is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Eureka Design Public and AEON Thana Sinsap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON Thana Sinsap 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 AEON Thana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON Thana Sinsap has no effect on the direction of Eureka Design i.e., Eureka Design and AEON Thana go up and down completely randomly.

Pair Corralation between Eureka Design and AEON Thana

Assuming the 90 days trading horizon Eureka Design Public is expected to generate 1.36 times more return on investment than AEON Thana. However, Eureka Design is 1.36 times more volatile than AEON Thana Sinsap. It trades about 0.17 of its potential returns per unit of risk. AEON Thana Sinsap is currently generating about 0.01 per unit of risk. If you would invest  50.00  in Eureka Design Public on September 4, 2024 and sell it today you would earn a total of  17.00  from holding Eureka Design Public or generate 34.0% return on investment over 90 days.

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

Eureka Design Public  vs.  AEON Thana Sinsap

Eureka Design Public

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eureka Design Public are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Eureka Design sustained solid returns over the last few months and may actually be approaching a breakup point.

AEON Thana Sinsap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEON Thana Sinsap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AEON Thana is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eureka Design and AEON Thana

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

The idea behind Eureka Design Public and AEON Thana Sinsap 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.