Correlation Between Bangkok Bank and CH Karnchang
Can any of the company-specific risk be diversified away by investing in both Bangkok Bank and CH Karnchang 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 CH Karnchang 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 CH Karnchang Public, you can compare the effects of market volatilities on Bangkok Bank and CH Karnchang 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 CH Karnchang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and CH Karnchang.
Diversification Opportunities for Bangkok Bank and CH Karnchang
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bangkok and CH Karnchang is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and CH Karnchang Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Karnchang Public 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 CH Karnchang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Karnchang Public has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and CH Karnchang go up and down completely randomly.
Pair Corralation between Bangkok Bank and CH Karnchang
Assuming the 90 days trading horizon Bangkok Bank Public is expected to generate 0.64 times more return on investment than CH Karnchang. However, Bangkok Bank Public is 1.56 times less risky than CH Karnchang. It trades about 0.04 of its potential returns per unit of risk. CH Karnchang Public is currently generating about -0.24 per unit of risk. If you would invest 15,250 in Bangkok Bank Public on November 4, 2024 and sell it today you would earn a total of 150.00 from holding Bangkok Bank Public or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Bank Public vs. CH Karnchang Public
Performance |
| Timeline |
| Bangkok Bank Public |
| CH Karnchang Public |
Bangkok Bank and CH Karnchang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Bank and CH Karnchang
The main advantage of trading using opposite Bangkok Bank and CH Karnchang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank position performs unexpectedly, CH Karnchang 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 CH Karnchang will offset losses from the drop in CH Karnchang's long position.| Bangkok Bank vs. SCB X Public | Bangkok Bank vs. Kasikornbank Public | Bangkok Bank vs. PTT Public | Bangkok Bank vs. The Siam Cement |
| CH Karnchang vs. Italian Thai Development Public | CH Karnchang vs. Charoen Pokphand Foods | CH Karnchang vs. Land and Houses | CH Karnchang vs. Bangkok Bank 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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