Correlation Between Bangkok Aviation and BCPG Public
Can any of the company-specific risk be diversified away by investing in both Bangkok Aviation and BCPG 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 Bangkok Aviation and BCPG Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Aviation Fuel and BCPG Public, you can compare the effects of market volatilities on Bangkok Aviation and BCPG 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 Bangkok Aviation with a short position of BCPG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Aviation and BCPG Public.
Diversification Opportunities for Bangkok Aviation and BCPG Public
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bangkok and BCPG is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Aviation Fuel and BCPG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCPG Public and Bangkok Aviation 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 Aviation Fuel are associated (or correlated) with BCPG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCPG Public has no effect on the direction of Bangkok Aviation i.e., Bangkok Aviation and BCPG Public go up and down completely randomly.
Pair Corralation between Bangkok Aviation and BCPG Public
Assuming the 90 days trading horizon Bangkok Aviation Fuel is expected to under-perform the BCPG Public. In addition to that, Bangkok Aviation is 1.02 times more volatile than BCPG Public. It trades about -0.25 of its total potential returns per unit of risk. BCPG Public is currently generating about -0.24 per unit of volatility. If you would invest 705.00 in BCPG Public on September 3, 2024 and sell it today you would lose (140.00) from holding BCPG Public or give up 19.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Aviation Fuel vs. BCPG Public
Performance |
| Timeline |
| Bangkok Aviation Fuel |
| BCPG Public |
Bangkok Aviation and BCPG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Aviation and BCPG Public
The main advantage of trading using opposite Bangkok Aviation and BCPG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Aviation position performs unexpectedly, BCPG 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 BCPG Public will offset losses from the drop in BCPG Public's long position.| Bangkok Aviation vs. Bangchak Public | Bangkok Aviation vs. Airports of Thailand | Bangkok Aviation vs. AP Public | Bangkok Aviation vs. Central Pattana Public |
| BCPG Public vs. Bangchak Public | BCPG Public vs. Gulf Energy Development | BCPG Public vs. Global Power Synergy | BCPG Public vs. Bangkok Expressway and |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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