Correlation Between Ekachai Medical and SAF Special

Can any of the company-specific risk be diversified away by investing in both Ekachai Medical and SAF Special 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 SAF Special 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 SAF Special Steel, you can compare the effects of market volatilities on Ekachai Medical and SAF Special 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 SAF Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekachai Medical and SAF Special.

Diversification Opportunities for Ekachai Medical and SAF Special

0.39

Correlation Coefficient

Ekachai Medical  SAF Special

Weak diversification

The 3 months correlation between Ekachai and SAF is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ekachai Medical Care and SAF Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Special Steel 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 SAF Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Special Steel has no effect on the direction of Ekachai Medical i.e., Ekachai Medical and SAF Special go up and down completely randomly.

Pair Corralation between Ekachai Medical and SAF Special

Assuming the 90 days trading horizon Ekachai Medical is expected to generate 1.03 times less return on investment than SAF Special. But when comparing it to its historical volatility, Ekachai Medical Care is 1.93 times less risky than SAF Special. It trades about 0.09 of its potential returns per unit of risk. SAF Special Steel is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  49.00  in SAF Special Steel on December 19, 2024 and sell it today you would earn a total of  3.00  from holding SAF Special Steel or generate 6.12% return on investment over 90 days.

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

Ekachai Medical Care  vs.  SAF Special Steel

Ekachai Medical Care

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ekachai Medical Care are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical indicators, Ekachai Medical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SAF Special Steel

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SAF Special Steel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, SAF Special may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ekachai Medical and SAF Special

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

The idea behind Ekachai Medical Care and SAF Special Steel 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.