Correlation Between Banpu Public and Forth Public
Can any of the company-specific risk be diversified away by investing in both Banpu Public and Forth 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 Banpu Public and Forth Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banpu Public and Forth Public, you can compare the effects of market volatilities on Banpu Public and Forth 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 Banpu Public with a short position of Forth Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banpu Public and Forth Public.
Diversification Opportunities for Banpu Public and Forth Public
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banpu and Forth is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Banpu Public and Forth Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forth Public and Banpu Public 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 Banpu Public are associated (or correlated) with Forth Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forth Public has no effect on the direction of Banpu Public i.e., Banpu Public and Forth Public go up and down completely randomly.
Pair Corralation between Banpu Public and Forth Public
Assuming the 90 days trading horizon Banpu Public is expected to generate 0.78 times more return on investment than Forth Public. However, Banpu Public is 1.29 times less risky than Forth Public. It trades about -0.14 of its potential returns per unit of risk. Forth Public is currently generating about -0.15 per unit of risk. If you would invest 625.00 in Banpu Public on September 1, 2024 and sell it today you would lose (55.00) from holding Banpu Public or give up 8.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Banpu Public vs. Forth Public
Performance |
| Timeline |
| Banpu Public |
| Forth Public |
Banpu Public and Forth Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banpu Public and Forth Public
The main advantage of trading using opposite Banpu Public and Forth Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banpu Public position performs unexpectedly, Forth 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 Forth Public will offset losses from the drop in Forth Public's long position.| Banpu Public vs. PTT Public | Banpu Public vs. PTT Exploration and | Banpu Public vs. Bangkok Bank Public | Banpu Public vs. Thai Oil Public |
| Forth Public vs. AP Public | Forth Public vs. Jasmine International Public | Forth Public vs. Asia Plus Group | Forth Public vs. Bangchak 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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