Correlation Between Bangchak Public and Premier Technology
Can any of the company-specific risk be diversified away by investing in both Bangchak Public and Premier Technology 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 Premier Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangchak Public and Premier Technology Public, you can compare the effects of market volatilities on Bangchak Public and Premier Technology 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 Premier Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangchak Public and Premier Technology.
Diversification Opportunities for Bangchak Public and Premier Technology
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bangchak and Premier is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bangchak Public and Premier Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Technology Public 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 Premier Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Technology Public has no effect on the direction of Bangchak Public i.e., Bangchak Public and Premier Technology go up and down completely randomly.
Pair Corralation between Bangchak Public and Premier Technology
Assuming the 90 days trading horizon Bangchak Public is expected to under-perform the Premier Technology. In addition to that, Bangchak Public is 3.33 times more volatile than Premier Technology Public. It trades about -0.17 of its total potential returns per unit of risk. Premier Technology Public is currently generating about -0.14 per unit of volatility. If you would invest 970.00 in Premier Technology Public on September 3, 2024 and sell it today you would lose (25.00) from holding Premier Technology Public or give up 2.58% 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. Premier Technology Public
Performance |
| Timeline |
| Bangchak Public |
| Premier Technology Public |
Bangchak Public and Premier Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangchak Public and Premier Technology
The main advantage of trading using opposite Bangchak Public and Premier Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangchak Public position performs unexpectedly, Premier Technology 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 Premier Technology will offset losses from the drop in Premier Technology'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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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