Correlation Between Synnex Public and Erawan

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

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

Diversification Opportunities for Synnex Public and Erawan

0.72

Correlation Coefficient

Synnex Public  Erawan

Poor diversification

The 3 months correlation between Synnex and Erawan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Synnex Public and The Erawan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erawan Group and Synnex Public 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 Synnex Public are associated (or correlated) with Erawan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erawan Group has no effect on the direction of Synnex Public i.e., Synnex Public and Erawan go up and down completely randomly.

Pair Corralation between Synnex Public and Erawan

Assuming the 90 days trading horizon Synnex Public is expected to under-perform the Erawan. In addition to that, Synnex Public is 1.23 times more volatile than The Erawan Group. It trades about -0.18 of its total potential returns per unit of risk. The Erawan Group is currently generating about -0.17 per unit of volatility. If you would invest  372.00  in The Erawan Group on December 30, 2024 and sell it today you would lose (90.00) from holding The Erawan Group or give up 24.19% of portfolio value over 90 days.

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

Synnex Public  vs.  The Erawan Group

Synnex Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Synnex Public 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Erawan Group

Risk-Adjusted Performance

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

Pair Trading with Synnex Public and Erawan

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

The idea behind Synnex Public and The Erawan Group 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.