Correlation Between Bangkok Bank and Somboon Advance
Can any of the company-specific risk be diversified away by investing in both Bangkok Bank and Somboon Advance 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 Somboon Advance 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 Somboon Advance Technology, you can compare the effects of market volatilities on Bangkok Bank and Somboon Advance 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 Somboon Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and Somboon Advance.
Diversification Opportunities for Bangkok Bank and Somboon Advance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bangkok and Somboon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and Somboon Advance Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Somboon Advance Tech 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 Somboon Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Somboon Advance Tech has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and Somboon Advance go up and down completely randomly.
Pair Corralation between Bangkok Bank and Somboon Advance
Assuming the 90 days trading horizon Bangkok Bank Public is expected to generate 0.85 times more return on investment than Somboon Advance. However, Bangkok Bank Public is 1.18 times less risky than Somboon Advance. It trades about 0.0 of its potential returns per unit of risk. Somboon Advance Technology is currently generating about -0.08 per unit of risk. If you would invest 14,941 in Bangkok Bank Public on August 28, 2024 and sell it today you would lose (91.00) from holding Bangkok Bank Public or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Bangkok Bank Public vs. Somboon Advance Technology
Performance |
| Timeline |
| Bangkok Bank Public |
| Somboon Advance Tech |
Bangkok Bank and Somboon Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Bank and Somboon Advance
The main advantage of trading using opposite Bangkok Bank and Somboon Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank position performs unexpectedly, Somboon Advance 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 Somboon Advance will offset losses from the drop in Somboon Advance'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 |
| Somboon Advance vs. AAPICO Hitech Public | Somboon Advance vs. Thai Stanley Electric | Somboon Advance vs. Hana Microelectronics Public | Somboon Advance vs. TISCO Financial 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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