Correlation Between 2S Metal and BPS TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both 2S Metal and BPS TECHNOLOGY 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 2S Metal and BPS TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2S Metal Public and BPS TECHNOLOGY PUBLIC, you can compare the effects of market volatilities on 2S Metal and BPS TECHNOLOGY 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 2S Metal with a short position of BPS TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and BPS TECHNOLOGY.
Diversification Opportunities for 2S Metal and BPS TECHNOLOGY
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2S Metal and BPS is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and BPS TECHNOLOGY PUBLIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BPS TECHNOLOGY PUBLIC and 2S Metal 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 2S Metal Public are associated (or correlated) with BPS TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BPS TECHNOLOGY PUBLIC has no effect on the direction of 2S Metal i.e., 2S Metal and BPS TECHNOLOGY go up and down completely randomly.
Pair Corralation between 2S Metal and BPS TECHNOLOGY
Assuming the 90 days horizon 2S Metal Public is expected to generate 0.39 times more return on investment than BPS TECHNOLOGY. However, 2S Metal Public is 2.58 times less risky than BPS TECHNOLOGY. It trades about -0.16 of its potential returns per unit of risk. BPS TECHNOLOGY PUBLIC is currently generating about -0.18 per unit of risk. If you would invest 294.00 in 2S Metal Public on August 31, 2024 and sell it today you would lose (16.00) from holding 2S Metal Public or give up 5.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
2S Metal Public vs. BPS TECHNOLOGY PUBLIC
Performance |
| Timeline |
| 2S Metal Public |
| BPS TECHNOLOGY PUBLIC |
2S Metal and BPS TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2S Metal and BPS TECHNOLOGY
The main advantage of trading using opposite 2S Metal and BPS TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, BPS TECHNOLOGY 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 BPS TECHNOLOGY will offset losses from the drop in BPS TECHNOLOGY's long position.| 2S Metal vs. Diamond Building Products | 2S Metal vs. MCS Steel Public | 2S Metal vs. Asia Green Energy | 2S Metal vs. Hwa Fong Rubber |
| BPS TECHNOLOGY vs. AP Public | BPS TECHNOLOGY vs. TRC Construction Public | BPS TECHNOLOGY vs. Bangkok Expressway and | BPS TECHNOLOGY vs. Lohakit Metal Public |
Check out your portfolio center.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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