Correlation Between Bangchak Public and MFEC PCL
Can any of the company-specific risk be diversified away by investing in both Bangchak Public and MFEC PCL 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 MFEC PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangchak Public and MFEC PCL, you can compare the effects of market volatilities on Bangchak Public and MFEC PCL 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 MFEC PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangchak Public and MFEC PCL.
Diversification Opportunities for Bangchak Public and MFEC PCL
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bangchak and MFEC is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bangchak Public and MFEC PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFEC PCL 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 MFEC PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFEC PCL has no effect on the direction of Bangchak Public i.e., Bangchak Public and MFEC PCL go up and down completely randomly.
Pair Corralation between Bangchak Public and MFEC PCL
Assuming the 90 days trading horizon Bangchak Public is expected to under-perform the MFEC PCL. But the stock apears to be less risky and, when comparing its historical volatility, Bangchak Public is 36.63 times less risky than MFEC PCL. The stock trades about -0.08 of its potential returns per unit of risk. The MFEC PCL is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 655.00 in MFEC PCL on September 3, 2024 and sell it today you would lose (25.00) from holding MFEC PCL or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangchak Public vs. MFEC PCL
Performance |
| Timeline |
| Bangchak Public |
| MFEC PCL |
Bangchak Public and MFEC PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangchak Public and MFEC PCL
The main advantage of trading using opposite Bangchak Public and MFEC PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangchak Public position performs unexpectedly, MFEC PCL 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 MFEC PCL will offset losses from the drop in MFEC PCL's long position.| Bangchak Public vs. Thai Oil Public | Bangchak Public vs. PTT Public | Bangchak Public vs. PTT Global Chemical | Bangchak Public vs. IRPC Public |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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