Correlation Between Asia Plus and Bank of Ayudhya
Can any of the company-specific risk be diversified away by investing in both Asia Plus and Bank of Ayudhya 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 Asia Plus and Bank of Ayudhya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Plus Group and Bank of Ayudhya, you can compare the effects of market volatilities on Asia Plus and Bank of Ayudhya 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 Asia Plus with a short position of Bank of Ayudhya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Plus and Bank of Ayudhya.
Diversification Opportunities for Asia Plus and Bank of Ayudhya
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Asia and Bank is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Asia Plus Group and Bank of Ayudhya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ayudhya and Asia Plus 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 Asia Plus Group are associated (or correlated) with Bank of Ayudhya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ayudhya has no effect on the direction of Asia Plus i.e., Asia Plus and Bank of Ayudhya go up and down completely randomly.
Pair Corralation between Asia Plus and Bank of Ayudhya
Assuming the 90 days trading horizon Asia Plus Group is expected to generate 0.68 times more return on investment than Bank of Ayudhya. However, Asia Plus Group is 1.47 times less risky than Bank of Ayudhya. It trades about -0.23 of its potential returns per unit of risk. Bank of Ayudhya is currently generating about -0.19 per unit of risk. If you would invest 232.00 in Asia Plus Group on December 1, 2024 and sell it today you would lose (8.00) from holding Asia Plus Group or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Plus Group vs. Bank of Ayudhya
Performance |
| Timeline |
| Asia Plus Group |
| Bank of Ayudhya |
Asia Plus and Bank of Ayudhya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Plus and Bank of Ayudhya
The main advantage of trading using opposite Asia Plus and Bank of Ayudhya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Plus position performs unexpectedly, Bank of Ayudhya 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 Bank of Ayudhya will offset losses from the drop in Bank of Ayudhya's long position.| Asia Plus vs. KGI Securities Public | Asia Plus vs. Bangkok Bank Public | Asia Plus vs. Land and Houses | Asia Plus vs. Italian Thai Development Public |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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