Correlation Between Bank of Ayudhya and Digital Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Bank of Ayudhya and Digital Telecommunicatio 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 Digital Telecommunicatio 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 Digital Telecommunications Infrastructure, you can compare the effects of market volatilities on Bank of Ayudhya and Digital Telecommunicatio 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 Digital Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ayudhya and Digital Telecommunicatio.
Diversification Opportunities for Bank of Ayudhya and Digital Telecommunicatio
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Digital is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ayudhya and Digital Telecommunications Inf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Telecommunicatio 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 Digital Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Telecommunicatio has no effect on the direction of Bank of Ayudhya i.e., Bank of Ayudhya and Digital Telecommunicatio go up and down completely randomly.
Pair Corralation between Bank of Ayudhya and Digital Telecommunicatio
Assuming the 90 days trading horizon Bank of Ayudhya is expected to generate 0.86 times more return on investment than Digital Telecommunicatio. However, Bank of Ayudhya is 1.16 times less risky than Digital Telecommunicatio. It trades about 0.03 of its potential returns per unit of risk. Digital Telecommunications Infrastructure is currently generating about -0.08 per unit of risk. If you would invest 2,490 in Bank of Ayudhya on August 27, 2024 and sell it today you would earn a total of 10.00 from holding Bank of Ayudhya or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Ayudhya vs. Digital Telecommunications Inf
Performance |
| Timeline |
| Bank of Ayudhya |
| Digital Telecommunicatio |
Bank of Ayudhya and Digital Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ayudhya and Digital Telecommunicatio
The main advantage of trading using opposite Bank of Ayudhya and Digital Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ayudhya position performs unexpectedly, Digital Telecommunicatio 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 Digital Telecommunicatio will offset losses from the drop in Digital Telecommunicatio's long position.| Bank of Ayudhya vs. Thai Energy Storage | Bank of Ayudhya vs. Royal Orchid Hotel | Bank of Ayudhya vs. Grand Canal Land | Bank of Ayudhya vs. PRG 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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