Correlation Between Bank of Ayudhya and AAPICO Hitech
Can any of the company-specific risk be diversified away by investing in both Bank of Ayudhya and AAPICO Hitech 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 Bank of Ayudhya and AAPICO Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Ayudhya and AAPICO Hitech Public, you can compare the effects of market volatilities on Bank of Ayudhya and AAPICO Hitech 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 Bank of Ayudhya with a short position of AAPICO Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ayudhya and AAPICO Hitech.
Diversification Opportunities for Bank of Ayudhya and AAPICO Hitech
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and AAPICO is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ayudhya and AAPICO Hitech Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAPICO Hitech Public and Bank of Ayudhya 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 Bank of Ayudhya are associated (or correlated) with AAPICO Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAPICO Hitech Public has no effect on the direction of Bank of Ayudhya i.e., Bank of Ayudhya and AAPICO Hitech go up and down completely randomly.
Pair Corralation between Bank of Ayudhya and AAPICO Hitech
Assuming the 90 days trading horizon Bank of Ayudhya is expected to generate 0.5 times more return on investment than AAPICO Hitech. However, Bank of Ayudhya is 2.01 times less risky than AAPICO Hitech. It trades about -0.11 of its potential returns per unit of risk. AAPICO Hitech Public is currently generating about -0.07 per unit of risk. If you would invest 2,390 in Bank of Ayudhya on November 27, 2024 and sell it today you would lose (50.00) from holding Bank of Ayudhya or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Ayudhya vs. AAPICO Hitech Public
Performance |
| Timeline |
| Bank of Ayudhya |
| AAPICO Hitech Public |
Bank of Ayudhya and AAPICO Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ayudhya and AAPICO Hitech
The main advantage of trading using opposite Bank of Ayudhya and AAPICO Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ayudhya position performs unexpectedly, AAPICO Hitech 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 AAPICO Hitech will offset losses from the drop in AAPICO Hitech's long position.| Bank of Ayudhya vs. Bangkok Bank Public | Bank of Ayudhya vs. Krung Thai Bank | Bank of Ayudhya vs. SCB X Public | Bank of Ayudhya vs. Kasikornbank 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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