Correlation Between Bank of Ayudhya and Medeze Group
Can any of the company-specific risk be diversified away by investing in both Bank of Ayudhya and Medeze Group 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 Medeze Group 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 Medeze Group PCL, you can compare the effects of market volatilities on Bank of Ayudhya and Medeze Group 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 Medeze Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ayudhya and Medeze Group.
Diversification Opportunities for Bank of Ayudhya and Medeze Group
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Medeze is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ayudhya and Medeze Group PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medeze Group PCL 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 Medeze Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medeze Group PCL has no effect on the direction of Bank of Ayudhya i.e., Bank of Ayudhya and Medeze Group go up and down completely randomly.
Pair Corralation between Bank of Ayudhya and Medeze Group
Assuming the 90 days trading horizon Bank of Ayudhya is expected to generate 0.21 times more return on investment than Medeze Group. However, Bank of Ayudhya is 4.84 times less risky than Medeze Group. It trades about 0.0 of its potential returns per unit of risk. Medeze Group PCL is currently generating about -0.26 per unit of risk. If you would invest 2,490 in Bank of Ayudhya on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Bank of Ayudhya or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank of Ayudhya vs. Medeze Group PCL
Performance |
| Timeline |
| Bank of Ayudhya |
| Medeze Group PCL |
Bank of Ayudhya and Medeze Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ayudhya and Medeze Group
The main advantage of trading using opposite Bank of Ayudhya and Medeze Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ayudhya position performs unexpectedly, Medeze Group 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 Medeze Group will offset losses from the drop in Medeze Group's long position.| Bank of Ayudhya vs. TISCO Financial Group | Bank of Ayudhya vs. Kasikornbank Public | Bank of Ayudhya vs. Thanachart Capital Public | Bank of Ayudhya vs. SCB X 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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