Correlation Between Ekarat Engineering and Amanah Leasing

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

By analyzing existing cross correlation between Ekarat Engineering Public and Amanah Leasing Public, you can compare the effects of market volatilities on Ekarat Engineering and Amanah Leasing 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 Ekarat Engineering with a short position of Amanah Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekarat Engineering and Amanah Leasing.

Diversification Opportunities for Ekarat Engineering and Amanah Leasing

-0.18

Correlation Coefficient

Ekarat Engineering  Amanah Leasing

Good diversification

The 3 months correlation between Ekarat and Amanah is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ekarat Engineering Public and Amanah Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amanah Leasing Public and Ekarat Engineering 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 Ekarat Engineering Public are associated (or correlated) with Amanah Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amanah Leasing Public has no effect on the direction of Ekarat Engineering i.e., Ekarat Engineering and Amanah Leasing go up and down completely randomly.

Pair Corralation between Ekarat Engineering and Amanah Leasing

Assuming the 90 days trading horizon Ekarat Engineering Public is expected to generate 0.65 times more return on investment than Amanah Leasing. However, Ekarat Engineering Public is 1.54 times less risky than Amanah Leasing. It trades about 0.12 of its potential returns per unit of risk. Amanah Leasing Public is currently generating about -0.12 per unit of risk. If you would invest  93.00  in Ekarat Engineering Public on September 25, 2024 and sell it today you would earn a total of  2.00  from holding Ekarat Engineering Public or generate 2.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Ekarat Engineering Public  vs.  Amanah Leasing Public

Ekarat Engineering Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Amanah Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amanah Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ekarat Engineering and Amanah Leasing

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

The idea behind Ekarat Engineering Public and Amanah Leasing Public 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 Global Correlations module to find global opportunities by holding instruments from different markets.