Correlation Between Bangkok Bank and Goodyear Public
Can any of the company-specific risk be diversified away by investing in both Bangkok Bank and Goodyear Public 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 Goodyear Public 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 Goodyear Public, you can compare the effects of market volatilities on Bangkok Bank and Goodyear Public 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 Goodyear Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and Goodyear Public.
Diversification Opportunities for Bangkok Bank and Goodyear Public
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bangkok and Goodyear is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and Goodyear Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodyear 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 Goodyear Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodyear Public has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and Goodyear Public go up and down completely randomly.
Pair Corralation between Bangkok Bank and Goodyear Public
Assuming the 90 days trading horizon Bangkok Bank Public is expected to under-perform the Goodyear Public. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Bank Public is 2.17 times less risky than Goodyear Public. The stock trades about -0.06 of its potential returns per unit of risk. The Goodyear Public is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 15,750 in Goodyear Public on August 27, 2024 and sell it today you would earn a total of 1,650 from holding Goodyear Public or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Bank Public vs. Goodyear Public
Performance |
| Timeline |
| Bangkok Bank Public |
| Goodyear Public |
Bangkok Bank and Goodyear Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Bank and Goodyear Public
The main advantage of trading using opposite Bangkok Bank and Goodyear Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank position performs unexpectedly, Goodyear Public 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 Goodyear Public will offset losses from the drop in Goodyear Public'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 |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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