Correlation Between East Coast and Ngern Tid

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

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

Diversification Opportunities for East Coast and Ngern Tid

-0.08

Correlation Coefficient

East Coast  Ngern Tid

Good diversification

The 3 months correlation between East and Ngern is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding East Coast Furnitech and Ngern Tid Lor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ngern Tid Lor and East Coast 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 East Coast Furnitech are associated (or correlated) with Ngern Tid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ngern Tid Lor has no effect on the direction of East Coast i.e., East Coast and Ngern Tid go up and down completely randomly.

Pair Corralation between East Coast and Ngern Tid

Assuming the 90 days trading horizon East Coast Furnitech is expected to under-perform the Ngern Tid. In addition to that, East Coast is 1.53 times more volatile than Ngern Tid Lor. It trades about -0.25 of its total potential returns per unit of risk. Ngern Tid Lor is currently generating about -0.06 per unit of volatility. If you would invest  1,656  in Ngern Tid Lor on December 30, 2024 and sell it today you would lose (216.00) from holding Ngern Tid Lor or give up 13.04% of portfolio value over 90 days.

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

East Coast Furnitech  vs.  Ngern Tid Lor

East Coast Furnitech

Risk-Adjusted Performance

Very Weak

Over the last 90 days East Coast Furnitech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ngern Tid Lor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ngern Tid Lor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with East Coast and Ngern Tid

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

The idea behind East Coast Furnitech and Ngern Tid Lor 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.