Correlation Between Eureka Design and Thanachart Capital

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

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

Diversification Opportunities for Eureka Design and Thanachart Capital

-0.21

Correlation Coefficient

Eureka Design  Thanachart Capital

Very good diversification

The 3 months correlation between Eureka and Thanachart is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Eureka Design Public and Thanachart Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanachart Capital Public and Eureka Design 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 Eureka Design Public are associated (or correlated) with Thanachart Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanachart Capital Public has no effect on the direction of Eureka Design i.e., Eureka Design and Thanachart Capital go up and down completely randomly.

Pair Corralation between Eureka Design and Thanachart Capital

Assuming the 90 days trading horizon Eureka Design Public is expected to generate 2.79 times more return on investment than Thanachart Capital. However, Eureka Design is 2.79 times more volatile than Thanachart Capital Public. It trades about 0.21 of its potential returns per unit of risk. Thanachart Capital Public is currently generating about -0.02 per unit of risk. If you would invest  51.00  in Eureka Design Public on September 11, 2024 and sell it today you would earn a total of  21.00  from holding Eureka Design Public or generate 41.18% return on investment over 90 days.

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

Eureka Design Public  vs.  Thanachart Capital Public

Eureka Design Public

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eureka Design Public are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Eureka Design sustained solid returns over the last few months and may actually be approaching a breakup point.

Thanachart Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thanachart Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Thanachart Capital 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 Eureka Design and Thanachart Capital

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

The idea behind Eureka Design Public and Thanachart Capital 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.