Correlation Between Bangchak Public and Interlink Communication
Can any of the company-specific risk be diversified away by investing in both Bangchak Public and Interlink Communication 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 Bangchak Public and Interlink Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangchak Public and Interlink Communication Public, you can compare the effects of market volatilities on Bangchak Public and Interlink Communication 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 Bangchak Public with a short position of Interlink Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangchak Public and Interlink Communication.
Diversification Opportunities for Bangchak Public and Interlink Communication
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bangchak and Interlink is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bangchak Public and Interlink Communication Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Communication and Bangchak Public 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 Bangchak Public are associated (or correlated) with Interlink Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlink Communication has no effect on the direction of Bangchak Public i.e., Bangchak Public and Interlink Communication go up and down completely randomly.
Pair Corralation between Bangchak Public and Interlink Communication
Assuming the 90 days trading horizon Bangchak Public is expected to under-perform the Interlink Communication. In addition to that, Bangchak Public is 1.13 times more volatile than Interlink Communication Public. It trades about -0.05 of its total potential returns per unit of risk. Interlink Communication Public is currently generating about -0.04 per unit of volatility. If you would invest 670.00 in Interlink Communication Public on September 1, 2024 and sell it today you would lose (85.00) from holding Interlink Communication Public or give up 12.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangchak Public vs. Interlink Communication Public
Performance |
| Timeline |
| Bangchak Public |
| Interlink Communication |
Bangchak Public and Interlink Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangchak Public and Interlink Communication
The main advantage of trading using opposite Bangchak Public and Interlink Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangchak Public position performs unexpectedly, Interlink Communication 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 Interlink Communication will offset losses from the drop in Interlink Communication's long position.| Bangchak Public vs. Sawang Export Public | Bangchak Public vs. Quality Houses Hotel | Bangchak Public vs. Grande Hospitality Real | Bangchak Public vs. City Steel 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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