Correlation Between Bangkok Bank and Thai Energy
Can any of the company-specific risk be diversified away by investing in both Bangkok Bank and Thai Energy 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 Bangkok Bank and Thai Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Bank Public and Thai Energy Storage, you can compare the effects of market volatilities on Bangkok Bank and Thai Energy 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 Bangkok Bank with a short position of Thai Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and Thai Energy.
Diversification Opportunities for Bangkok Bank and Thai Energy
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bangkok and Thai is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and Thai Energy Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Energy Storage and Bangkok Bank 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 Bangkok Bank Public are associated (or correlated) with Thai Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Energy Storage has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and Thai Energy go up and down completely randomly.
Pair Corralation between Bangkok Bank and Thai Energy
Assuming the 90 days trading horizon Bangkok Bank Public is expected to under-perform the Thai Energy. In addition to that, Bangkok Bank is 2.97 times more volatile than Thai Energy Storage. It trades about -0.06 of its total potential returns per unit of risk. Thai Energy Storage is currently generating about 0.07 per unit of volatility. If you would invest 5,350 in Thai Energy Storage on August 28, 2024 and sell it today you would earn a total of 25.00 from holding Thai Energy Storage or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Bank Public vs. Thai Energy Storage
Performance |
| Timeline |
| Bangkok Bank Public |
| Thai Energy Storage |
Bangkok Bank and Thai Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Bank and Thai Energy
The main advantage of trading using opposite Bangkok Bank and Thai Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank position performs unexpectedly, Thai Energy 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 Thai Energy will offset losses from the drop in Thai Energy's long position.| Bangkok Bank vs. Thai Energy Storage | Bangkok Bank vs. Royal Orchid Hotel | Bangkok Bank vs. Grand Canal Land | Bangkok Bank vs. PRG Public |
| Thai Energy vs. AJ Advance Technology | Thai Energy vs. Asia Precision Public | Thai Energy vs. Asia Metal Public | Thai Energy vs. The Erawan Group |
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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