Correlation Between Erawan and Winner Group

Can any of the company-specific risk be diversified away by investing in both Erawan and Winner 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 Erawan and Winner Group 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 Winner Group Enterprise, you can compare the effects of market volatilities on Erawan and Winner 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 Erawan with a short position of Winner Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Winner Group.

Diversification Opportunities for Erawan and Winner Group

0.2

Correlation Coefficient

Erawan  Winner Group

Modest diversification

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

Pair Corralation between Erawan and Winner Group

Assuming the 90 days trading horizon The Erawan Group is expected to under-perform the Winner Group. In addition to that, Erawan is 2.76 times more volatile than Winner Group Enterprise. It trades about -0.09 of its total potential returns per unit of risk. Winner Group Enterprise is currently generating about -0.11 per unit of volatility. If you would invest  208.00  in Winner Group Enterprise on October 6, 2024 and sell it today you would lose (8.00) from holding Winner Group Enterprise or give up 3.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.56%
Values	Daily Returns

The Erawan Group  vs.  Winner Group Enterprise

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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Winner Group Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winner Group Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Winner Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Erawan and Winner Group

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

The idea behind The Erawan Group and Winner Group Enterprise 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.