Correlation Between Bangkok Bank and Muangthai Capital
Can any of the company-specific risk be diversified away by investing in both Bangkok Bank and Muangthai Capital 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 Muangthai Capital 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 Muangthai Capital Public, you can compare the effects of market volatilities on Bangkok Bank and Muangthai Capital 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 Muangthai Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and Muangthai Capital.
Diversification Opportunities for Bangkok Bank and Muangthai Capital
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bangkok and Muangthai is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and Muangthai Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muangthai Capital 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 Muangthai Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muangthai Capital Public has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and Muangthai Capital go up and down completely randomly.
Pair Corralation between Bangkok Bank and Muangthai Capital
Assuming the 90 days trading horizon Bangkok Bank is expected to generate 60.86 times less return on investment than Muangthai Capital. But when comparing it to its historical volatility, Bangkok Bank Public is 55.61 times less risky than Muangthai Capital. It trades about 0.05 of its potential returns per unit of risk. Muangthai Capital Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,429 in Muangthai Capital Public on November 3, 2024 and sell it today you would lose (54.00) from holding Muangthai Capital Public or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Bangkok Bank Public vs. Muangthai Capital Public
Performance |
| Timeline |
| Bangkok Bank Public |
| Muangthai Capital Public |
Bangkok Bank and Muangthai Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Bank and Muangthai Capital
The main advantage of trading using opposite Bangkok Bank and Muangthai Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank position performs unexpectedly, Muangthai Capital 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 Muangthai Capital will offset losses from the drop in Muangthai Capital'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 |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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