Correlation Between Bank of Ayudhya and Stock Exchange
Can any of the company-specific risk be diversified away by investing in both Bank of Ayudhya and Stock Exchange 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 Stock Exchange 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 Stock Exchange Of, you can compare the effects of market volatilities on Bank of Ayudhya and Stock Exchange 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 Stock Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ayudhya and Stock Exchange.
Diversification Opportunities for Bank of Ayudhya and Stock Exchange
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Stock is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ayudhya and Stock Exchange Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Exchange 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 Stock Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Exchange has no effect on the direction of Bank of Ayudhya i.e., Bank of Ayudhya and Stock Exchange go up and down completely randomly.
Pair Corralation between Bank of Ayudhya and Stock Exchange
Assuming the 90 days trading horizon Bank of Ayudhya is expected to generate 0.82 times more return on investment than Stock Exchange. However, Bank of Ayudhya is 1.21 times less risky than Stock Exchange. It trades about -0.15 of its potential returns per unit of risk. Stock Exchange Of is currently generating about -0.14 per unit of risk. If you would invest 2,440 in Bank of Ayudhya on October 25, 2024 and sell it today you would lose (50.00) from holding Bank of Ayudhya or give up 2.05% 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. Stock Exchange Of
Performance |
| Timeline |
Bank of Ayudhya and Stock Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Bank of Ayudhya
Pair trading matchups for Bank of Ayudhya
Stock Exchange Of
Pair trading matchups for Stock Exchange
Pair Trading with Bank of Ayudhya and Stock Exchange
The main advantage of trading using opposite Bank of Ayudhya and Stock Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ayudhya position performs unexpectedly, Stock Exchange 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 Stock Exchange will offset losses from the drop in Stock Exchange'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 |
| Stock Exchange vs. Bank of Ayudhya | Stock Exchange vs. CPR Gomu Industrial | Stock Exchange vs. TMC Industrial Public | Stock Exchange vs. WHA Industrial Leasehold |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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