Correlation Between Bualuang Office and RPCG Public
Can any of the company-specific risk be diversified away by investing in both Bualuang Office and RPCG Public 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 Bualuang Office and RPCG Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bualuang Office Leasehold and RPCG Public, you can compare the effects of market volatilities on Bualuang Office and RPCG Public 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 Bualuang Office with a short position of RPCG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bualuang Office and RPCG Public.
Diversification Opportunities for Bualuang Office and RPCG Public
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bualuang and RPCG is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bualuang Office Leasehold and RPCG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPCG Public and Bualuang Office 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 Bualuang Office Leasehold are associated (or correlated) with RPCG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPCG Public has no effect on the direction of Bualuang Office i.e., Bualuang Office and RPCG Public go up and down completely randomly.
Pair Corralation between Bualuang Office and RPCG Public
Assuming the 90 days trading horizon Bualuang Office Leasehold is expected to under-perform the RPCG Public. But the stock apears to be less risky and, when comparing its historical volatility, Bualuang Office Leasehold is 36.25 times less risky than RPCG Public. The stock trades about -0.06 of its potential returns per unit of risk. The RPCG Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 88.00 in RPCG Public on September 3, 2024 and sell it today you would lose (43.00) from holding RPCG Public or give up 48.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.08% |
| Values | Daily Returns |
Bualuang Office Leasehold vs. RPCG Public
Performance |
| Timeline |
| Bualuang Office Leasehold |
| RPCG Public |
Bualuang Office and RPCG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bualuang Office and RPCG Public
The main advantage of trading using opposite Bualuang Office and RPCG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bualuang Office position performs unexpectedly, RPCG Public 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 RPCG Public will offset losses from the drop in RPCG Public's long position.| Bualuang Office vs. Grande Hospitality Real | Bualuang Office vs. BA Airport Leasehold | Bualuang Office vs. CENTRAL RETAIL P | Bualuang Office vs. WHA Industrial Leasehold |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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