Correlation Between Ekachai Medical and Carabao Group

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

By analyzing existing cross correlation between Ekachai Medical Care and Carabao Group Public, you can compare the effects of market volatilities on Ekachai Medical and Carabao Group 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 Ekachai Medical with a short position of Carabao Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekachai Medical and Carabao Group.

Diversification Opportunities for Ekachai Medical and Carabao Group

0.2

Correlation Coefficient

Ekachai Medical  Carabao Group

Modest diversification

The 3 months correlation between Ekachai and Carabao is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ekachai Medical Care and Carabao Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carabao Group Public and Ekachai Medical 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 Ekachai Medical Care are associated (or correlated) with Carabao Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carabao Group Public has no effect on the direction of Ekachai Medical i.e., Ekachai Medical and Carabao Group go up and down completely randomly.

Pair Corralation between Ekachai Medical and Carabao Group

Assuming the 90 days trading horizon Ekachai Medical Care is expected to generate 0.62 times more return on investment than Carabao Group. However, Ekachai Medical Care is 1.6 times less risky than Carabao Group. It trades about -0.02 of its potential returns per unit of risk. Carabao Group Public is currently generating about -0.01 per unit of risk. If you would invest  753.00  in Ekachai Medical Care on October 12, 2024 and sell it today you would lose (108.00) from holding Ekachai Medical Care or give up 14.34% of portfolio value over 90 days.

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

Ekachai Medical Care  vs.  Carabao Group Public

Ekachai Medical Care

Risk-Adjusted Performance

0 of 100

Very Weak

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

Carabao Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ekachai Medical and Carabao Group

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

The idea behind Ekachai Medical Care and Carabao Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.