Correlation Between Erawan and After You

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

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

Diversification Opportunities for Erawan and After You

-0.66

Correlation Coefficient

Erawan  After You

Excellent diversification

The 3 months correlation between Erawan and After is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and After You Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on After You Public and Erawan 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 The Erawan Group are associated (or correlated) with After You. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of After You Public has no effect on the direction of Erawan i.e., Erawan and After You go up and down completely randomly.

Pair Corralation between Erawan and After You

Assuming the 90 days trading horizon The Erawan Group is expected to under-perform the After You. In addition to that, Erawan is 1.35 times more volatile than After You Public. It trades about -0.04 of its total potential returns per unit of risk. After You Public is currently generating about 0.01 per unit of volatility. If you would invest  1,100  in After You Public on September 29, 2024 and sell it today you would earn a total of  0.00  from holding After You Public or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

The Erawan Group  vs.  After You Public

Erawan Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Erawan Group 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 quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

After You Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in After You Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, After You disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Erawan and After You

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

The idea behind The Erawan Group and After You 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 Stocks Directory module to find actively traded stocks across global markets.