Correlation Between Akkhie Prakarn and East Coast

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

By analyzing existing cross correlation between Akkhie Prakarn Public and East Coast Furnitech, you can compare the effects of market volatilities on Akkhie Prakarn and East Coast 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 Akkhie Prakarn with a short position of East Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akkhie Prakarn and East Coast.

Diversification Opportunities for Akkhie Prakarn and East Coast

0.89

Correlation Coefficient

Akkhie Prakarn  East Coast

Very poor diversification

The 3 months correlation between Akkhie and East is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Akkhie Prakarn Public and East Coast Furnitech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Coast Furnitech and Akkhie Prakarn 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 Akkhie Prakarn Public are associated (or correlated) with East Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Coast Furnitech has no effect on the direction of Akkhie Prakarn i.e., Akkhie Prakarn and East Coast go up and down completely randomly.

Pair Corralation between Akkhie Prakarn and East Coast

Assuming the 90 days trading horizon Akkhie Prakarn Public is expected to generate 1.0 times more return on investment than East Coast. However, Akkhie Prakarn Public is 1.0 times less risky than East Coast. It trades about 0.13 of its potential returns per unit of risk. East Coast Furnitech is currently generating about 0.13 per unit of risk. If you would invest  0.00  in Akkhie Prakarn Public on September 3, 2024 and sell it today you would earn a total of  72.00  from holding Akkhie Prakarn Public or generate 9.223372036854776E16% return on investment over 90 days.

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

Akkhie Prakarn Public  vs.  East Coast Furnitech

Akkhie Prakarn Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akkhie Prakarn Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Akkhie Prakarn disclosed solid returns over the last few months and may actually be approaching a breakup point.

East Coast Furnitech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in East Coast Furnitech are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, East Coast disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akkhie Prakarn and East Coast

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

The idea behind Akkhie Prakarn Public and East Coast Furnitech 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.