Correlation Between Bangkok Bank and SCB X
Can any of the company-specific risk be diversified away by investing in both Bangkok Bank and SCB X 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 SCB X 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 SCB X Public, you can compare the effects of market volatilities on Bangkok Bank and SCB X 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 SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and SCB X.
Diversification Opportunities for Bangkok Bank and SCB X
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bangkok and SCB is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and SCB X Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCB X 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 SCB X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCB X Public has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and SCB X go up and down completely randomly.
Pair Corralation between Bangkok Bank and SCB X
Assuming the 90 days trading horizon Bangkok Bank is expected to generate 9.53 times less return on investment than SCB X. In addition to that, Bangkok Bank is 1.05 times more volatile than SCB X Public. It trades about 0.01 of its total potential returns per unit of risk. SCB X Public is currently generating about 0.08 per unit of volatility. If you would invest 8,479 in SCB X Public on November 5, 2024 and sell it today you would earn a total of 4,021 from holding SCB X Public or generate 47.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bangkok Bank Public vs. SCB X Public
Performance |
| Timeline |
| Bangkok Bank Public |
| SCB X Public |
Bangkok Bank and SCB X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Bank and SCB X
The main advantage of trading using opposite Bangkok Bank and SCB X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank position performs unexpectedly, SCB X 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 SCB X will offset losses from the drop in SCB X'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 |
| SCB X vs. JKN Global Media | SCB X vs. PTT Global Chemical | SCB X vs. Wattanapat Hospital Trang | SCB X vs. Rajthanee Hospital 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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