Correlation Between Banpu Public and Grand Canal
Can any of the company-specific risk be diversified away by investing in both Banpu Public and Grand Canal 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 Grand Canal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banpu Public and Grand Canal Land, you can compare the effects of market volatilities on Banpu Public and Grand Canal 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 Grand Canal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banpu Public and Grand Canal.
Diversification Opportunities for Banpu Public and Grand Canal
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banpu and Grand is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Banpu Public and Grand Canal Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canal Land 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 Grand Canal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canal Land has no effect on the direction of Banpu Public i.e., Banpu Public and Grand Canal go up and down completely randomly.
Pair Corralation between Banpu Public and Grand Canal
Assuming the 90 days trading horizon Banpu Public is expected to under-perform the Grand Canal. But the stock apears to be less risky and, when comparing its historical volatility, Banpu Public is 21.34 times less risky than Grand Canal. The stock trades about -0.05 of its potential returns per unit of risk. The Grand Canal Land is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 221.00 in Grand Canal Land on October 24, 2024 and sell it today you would lose (99.00) from holding Grand Canal Land or give up 44.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Banpu Public vs. Grand Canal Land
Performance |
| Timeline |
| Banpu Public |
| Grand Canal Land |
Banpu Public and Grand Canal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banpu Public and Grand Canal
The main advantage of trading using opposite Banpu Public and Grand Canal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banpu Public position performs unexpectedly, Grand Canal 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 Grand Canal will offset losses from the drop in Grand Canal'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 |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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