Correlation Between Bangkok Chain and Plan B
Can any of the company-specific risk be diversified away by investing in both Bangkok Chain and Plan B 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 Plan B 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 Plan B Media, you can compare the effects of market volatilities on Bangkok Chain and Plan B 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 Plan B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Chain and Plan B.
Diversification Opportunities for Bangkok Chain and Plan B
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bangkok and Plan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Chain Hospital and Plan B Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plan B Media 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 Plan B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plan B Media has no effect on the direction of Bangkok Chain i.e., Bangkok Chain and Plan B go up and down completely randomly.
Pair Corralation between Bangkok Chain and Plan B
Assuming the 90 days trading horizon Bangkok Chain Hospital is expected to under-perform the Plan B. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Chain Hospital is 29.28 times less risky than Plan B. The stock trades about -0.02 of its potential returns per unit of risk. The Plan B Media is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 796.00 in Plan B Media on August 26, 2024 and sell it today you would lose (81.00) from holding Plan B Media or give up 10.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Chain Hospital vs. Plan B Media
Performance |
| Timeline |
| Bangkok Chain Hospital |
| Plan B Media |
Bangkok Chain and Plan B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Chain and Plan B
The main advantage of trading using opposite Bangkok Chain and Plan B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Chain position performs unexpectedly, Plan B 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 Plan B will offset losses from the drop in Plan B'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 |
| Plan B vs. VGI Public | Plan B vs. Minor International Public | Plan B vs. BTS Group Holdings | Plan B vs. Bangkok Dusit Medical |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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