Correlation Between Bangkok Chain and AP Public
Can any of the company-specific risk be diversified away by investing in both Bangkok Chain and AP Public 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 Chain and AP Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Chain Hospital and AP Public, you can compare the effects of market volatilities on Bangkok Chain and AP Public 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 Chain with a short position of AP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Chain and AP Public.
Diversification Opportunities for Bangkok Chain and AP Public
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bangkok and AP Public is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Chain Hospital and AP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Public and Bangkok Chain 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 Chain Hospital are associated (or correlated) with AP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Public has no effect on the direction of Bangkok Chain i.e., Bangkok Chain and AP Public go up and down completely randomly.
Pair Corralation between Bangkok Chain and AP Public
Assuming the 90 days trading horizon Bangkok Chain Hospital is expected to under-perform the AP Public. In addition to that, Bangkok Chain is 1.02 times more volatile than AP Public. It trades about -0.06 of its total potential returns per unit of risk. AP Public is currently generating about -0.01 per unit of volatility. If you would invest 925.00 in AP Public on August 28, 2024 and sell it today you would lose (45.00) from holding AP Public or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Chain Hospital vs. AP Public
Performance |
| Timeline |
| Bangkok Chain Hospital |
| AP Public |
Bangkok Chain and AP Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Chain and AP Public
The main advantage of trading using opposite Bangkok Chain and AP Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Chain position performs unexpectedly, AP Public 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 AP Public will offset losses from the drop in AP Public's long position.| Bangkok Chain vs. Bangkok Dusit Medical | Bangkok Chain vs. Chularat Hospital Public | Bangkok Chain vs. Bumrungrad Hospital Public | Bangkok Chain vs. Advanced Info Service |
| AP Public vs. Land and Houses | AP Public vs. Quality Houses Public | AP Public vs. Bangkok Bank Public | AP Public vs. Siri Prime Office |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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