Correlation Between Bangkok Bank and Siam Commercial
Can any of the company-specific risk be diversified away by investing in both Bangkok Bank and Siam Commercial 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 Siam Commercial 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 The Siam Commercial, you can compare the effects of market volatilities on Bangkok Bank and Siam Commercial 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 Siam Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and Siam Commercial.
Diversification Opportunities for Bangkok Bank and Siam Commercial
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bangkok and Siam is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and The Siam Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Commercial 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 Siam Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Commercial has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and Siam Commercial go up and down completely randomly.
Pair Corralation between Bangkok Bank and Siam Commercial
Assuming the 90 days trading horizon Bangkok Bank is expected to generate 1125.34 times less return on investment than Siam Commercial. But when comparing it to its historical volatility, Bangkok Bank Public is 67.38 times less risky than Siam Commercial. It trades about 0.0 of its potential returns per unit of risk. The Siam Commercial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10,863 in The Siam Commercial on August 28, 2024 and sell it today you would earn a total of 637.00 from holding The Siam Commercial or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Bank Public vs. The Siam Commercial
Performance |
| Timeline |
| Bangkok Bank Public |
| Siam Commercial |
Bangkok Bank and Siam Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Bank and Siam Commercial
The main advantage of trading using opposite Bangkok Bank and Siam Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank position performs unexpectedly, Siam Commercial 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 Siam Commercial will offset losses from the drop in Siam Commercial'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 |
| Siam Commercial vs. The Siam Cement | Siam Commercial vs. Krung Thai Bank | Siam Commercial vs. Airports of Thailand | Siam Commercial vs. Kasikornbank 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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