Correlation Between AJ Plast and Bangkok Dusit
Can any of the company-specific risk be diversified away by investing in both AJ Plast 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 AJ Plast and Bangkok Dusit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Plast Public and Bangkok Dusit Medical, you can compare the effects of market volatilities on AJ Plast 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 AJ Plast with a short position of Bangkok Dusit. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Plast and Bangkok Dusit.
Diversification Opportunities for AJ Plast and Bangkok Dusit
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AJ Plast and Bangkok is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AJ Plast Public 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 AJ Plast 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 AJ Plast Public 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 AJ Plast i.e., AJ Plast and Bangkok Dusit go up and down completely randomly.
Pair Corralation between AJ Plast and Bangkok Dusit
Assuming the 90 days horizon AJ Plast Public is expected to generate 86.13 times more return on investment than Bangkok Dusit. However, AJ Plast is 86.13 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 535.00 in AJ Plast Public on September 2, 2024 and sell it today you would lose (55.00) from holding AJ Plast Public or give up 10.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Plast Public vs. Bangkok Dusit Medical
Performance |
| Timeline |
| AJ Plast Public |
| Bangkok Dusit Medical |
AJ Plast and Bangkok Dusit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Plast and Bangkok Dusit
The main advantage of trading using opposite AJ Plast and Bangkok Dusit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Plast 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.| AJ Plast vs. AAPICO Hitech Public | AJ Plast vs. AP Public | AJ Plast vs. Aikchol Hospital Public | AJ Plast vs. Bank of Ayudhya |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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