Correlation Between Bangkok Airways and Intouch Holdings
Can any of the company-specific risk be diversified away by investing in both Bangkok Airways and Intouch Holdings 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 Bangkok Airways and Intouch Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Airways Public and Intouch Holdings Public, you can compare the effects of market volatilities on Bangkok Airways and Intouch Holdings 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 Bangkok Airways with a short position of Intouch Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Airways and Intouch Holdings.
Diversification Opportunities for Bangkok Airways and Intouch Holdings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bangkok and Intouch is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Airways Public and Intouch Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Holdings Public and Bangkok Airways 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 Bangkok Airways Public are associated (or correlated) with Intouch Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Holdings Public has no effect on the direction of Bangkok Airways i.e., Bangkok Airways and Intouch Holdings go up and down completely randomly.
Pair Corralation between Bangkok Airways and Intouch Holdings
Assuming the 90 days horizon Bangkok Airways Public is expected to generate 1.56 times more return on investment than Intouch Holdings. However, Bangkok Airways is 1.56 times more volatile than Intouch Holdings Public. It trades about 0.08 of its potential returns per unit of risk. Intouch Holdings Public is currently generating about 0.07 per unit of risk. If you would invest 1,239 in Bangkok Airways Public on August 27, 2024 and sell it today you would earn a total of 1,211 from holding Bangkok Airways Public or generate 97.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Airways Public vs. Intouch Holdings Public
Performance |
| Timeline |
| Bangkok Airways Public |
| Intouch Holdings Public |
Bangkok Airways and Intouch Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Airways and Intouch Holdings
The main advantage of trading using opposite Bangkok Airways and Intouch Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Airways position performs unexpectedly, Intouch Holdings 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 Intouch Holdings will offset losses from the drop in Intouch Holdings' long position.| Bangkok Airways vs. Tata Steel Public | Bangkok Airways vs. Thaifoods Group Public | Bangkok Airways vs. TMT Steel Public | Bangkok Airways vs. The Erawan Group |
| Intouch Holdings vs. Indara Insurance Public | Intouch Holdings vs. Regional Container Lines | Intouch Holdings vs. Regional Container Lines | Intouch Holdings vs. Mahachai Hospital 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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