Correlation Between Advanced Information and Bangkok Dusit
Can any of the company-specific risk be diversified away by investing in both Advanced Information and Bangkok Dusit 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 Advanced Information and Bangkok Dusit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Information Technology and Bangkok Dusit Medical, you can compare the effects of market volatilities on Advanced Information and Bangkok Dusit 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 Advanced Information with a short position of Bangkok Dusit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Information and Bangkok Dusit.
Diversification Opportunities for Advanced Information and Bangkok Dusit
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advanced and Bangkok is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Information Technolog and Bangkok Dusit Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Dusit Medical and Advanced Information 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 Advanced Information Technology are associated (or correlated) with Bangkok Dusit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Dusit Medical has no effect on the direction of Advanced Information i.e., Advanced Information and Bangkok Dusit go up and down completely randomly.
Pair Corralation between Advanced Information and Bangkok Dusit
Assuming the 90 days trading horizon Advanced Information Technology is expected to generate 86.11 times more return on investment than Bangkok Dusit. However, Advanced Information is 86.11 times more volatile than Bangkok Dusit Medical. It trades about 0.11 of its potential returns per unit of risk. Bangkok Dusit Medical is currently generating about -0.08 per unit of risk. If you would invest 402.00 in Advanced Information Technology on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Advanced Information Technology or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Information Technolog vs. Bangkok Dusit Medical
Performance |
| Timeline |
| Advanced Information |
| Bangkok Dusit Medical |
Advanced Information and Bangkok Dusit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Information and Bangkok Dusit
The main advantage of trading using opposite Advanced Information and Bangkok Dusit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Information position performs unexpectedly, Bangkok Dusit 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 Bangkok Dusit will offset losses from the drop in Bangkok Dusit's long position.| Advanced Information vs. AP Public | Advanced Information vs. Jasmine International Public | Advanced Information vs. Asia Plus Group | Advanced Information vs. Bangchak Public |
| Bangkok Dusit vs. AP Public | Bangkok Dusit vs. Advanced Information Technology | Bangkok Dusit vs. AJ Plast Public | Bangkok Dusit vs. Berli Jucker 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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