Correlation Between Banpu Public and Land
Can any of the company-specific risk be diversified away by investing in both Banpu Public and Land 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 Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banpu Public and Land and Houses, you can compare the effects of market volatilities on Banpu Public and Land 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 Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banpu Public and Land.
Diversification Opportunities for Banpu Public and Land
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banpu and Land is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Banpu Public and Land and Houses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land and Houses 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 Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land and Houses has no effect on the direction of Banpu Public i.e., Banpu Public and Land go up and down completely randomly.
Pair Corralation between Banpu Public and Land
Assuming the 90 days trading horizon Banpu Public is expected to under-perform the Land. But the stock apears to be less risky and, when comparing its historical volatility, Banpu Public is 21.94 times less risky than Land. The stock trades about -0.05 of its potential returns per unit of risk. The Land and Houses is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 867.00 in Land and Houses on August 28, 2024 and sell it today you would lose (307.00) from holding Land and Houses or give up 35.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banpu Public vs. Land and Houses
Performance |
| Timeline |
| Banpu Public |
| Land and Houses |
Banpu Public and Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banpu Public and Land
The main advantage of trading using opposite Banpu Public and Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banpu Public position performs unexpectedly, Land 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 Land will offset losses from the drop in Land's long position.The idea behind Banpu Public and Land and Houses pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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