Correlation Between Bangkok Bank and TPI Polene
Can any of the company-specific risk be diversified away by investing in both Bangkok Bank and TPI Polene 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 TPI Polene 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 TPI Polene Power, you can compare the effects of market volatilities on Bangkok Bank and TPI Polene 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 TPI Polene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and TPI Polene.
Diversification Opportunities for Bangkok Bank and TPI Polene
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bangkok and TPI is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and TPI Polene Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPI Polene Power 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 TPI Polene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPI Polene Power has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and TPI Polene go up and down completely randomly.
Pair Corralation between Bangkok Bank and TPI Polene
Assuming the 90 days trading horizon Bangkok Bank Public is expected to generate 1.15 times more return on investment than TPI Polene. However, Bangkok Bank is 1.15 times more volatile than TPI Polene Power. It trades about 0.06 of its potential returns per unit of risk. TPI Polene Power is currently generating about -0.04 per unit of risk. If you would invest 13,456 in Bangkok Bank Public on August 29, 2024 and sell it today you would earn a total of 1,244 from holding Bangkok Bank Public or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Bank Public vs. TPI Polene Power
Performance |
| Timeline |
| Bangkok Bank Public |
| TPI Polene Power |
Bangkok Bank and TPI Polene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Bank and TPI Polene
The main advantage of trading using opposite Bangkok Bank and TPI Polene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank position performs unexpectedly, TPI Polene 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 TPI Polene will offset losses from the drop in TPI Polene'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 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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