Correlation Between Bank of Ayudhya and Union Plastic
Can any of the company-specific risk be diversified away by investing in both Bank of Ayudhya and Union Plastic 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 Union Plastic 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 Union Plastic Public, you can compare the effects of market volatilities on Bank of Ayudhya and Union Plastic 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 Union Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ayudhya and Union Plastic.
Diversification Opportunities for Bank of Ayudhya and Union Plastic
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Union is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ayudhya and Union Plastic Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Plastic 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 Union Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Plastic Public has no effect on the direction of Bank of Ayudhya i.e., Bank of Ayudhya and Union Plastic go up and down completely randomly.
Pair Corralation between Bank of Ayudhya and Union Plastic
Assuming the 90 days trading horizon Bank of Ayudhya is expected to under-perform the Union Plastic. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Ayudhya is 51.98 times less risky than Union Plastic. The stock trades about -0.02 of its potential returns per unit of risk. The Union Plastic Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,543 in Union Plastic Public on September 2, 2024 and sell it today you would earn a total of 137.00 from holding Union Plastic Public or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.17% |
| Values | Daily Returns |
Bank of Ayudhya vs. Union Plastic Public
Performance |
| Timeline |
| Bank of Ayudhya |
| Union Plastic Public |
Bank of Ayudhya and Union Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ayudhya and Union Plastic
The main advantage of trading using opposite Bank of Ayudhya and Union Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ayudhya position performs unexpectedly, Union Plastic 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 Union Plastic will offset losses from the drop in Union Plastic'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 |
| Union Plastic vs. AAPICO Hitech Public | Union Plastic vs. AP Public | Union Plastic vs. Aikchol Hospital Public | Union Plastic vs. Bank of Ayudhya |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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