Correlation Between Bangchak Public and Sakol Energy
Can any of the company-specific risk be diversified away by investing in both Bangchak Public and Sakol Energy 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 Sakol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangchak Public and Sakol Energy Public, you can compare the effects of market volatilities on Bangchak Public and Sakol Energy 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 Sakol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangchak Public and Sakol Energy.
Diversification Opportunities for Bangchak Public and Sakol Energy
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bangchak and Sakol is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bangchak Public and Sakol Energy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sakol Energy 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 Sakol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sakol Energy Public has no effect on the direction of Bangchak Public i.e., Bangchak Public and Sakol Energy go up and down completely randomly.
Pair Corralation between Bangchak Public and Sakol Energy
Assuming the 90 days trading horizon Bangchak Public is expected to under-perform the Sakol Energy. But the stock apears to be less risky and, when comparing its historical volatility, Bangchak Public is 1.0 times less risky than Sakol Energy. The stock trades about -0.3 of its potential returns per unit of risk. The Sakol Energy Public is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Sakol Energy Public on September 20, 2024 and sell it today you would lose (2.00) from holding Sakol Energy Public or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangchak Public vs. Sakol Energy Public
Performance |
| Timeline |
| Bangchak Public |
| Sakol Energy Public |
Bangchak Public and Sakol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangchak Public and Sakol Energy
The main advantage of trading using opposite Bangchak Public and Sakol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangchak Public position performs unexpectedly, Sakol Energy 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 Sakol Energy will offset losses from the drop in Sakol Energy's long position.| Bangchak Public vs. IRPC Public | Bangchak Public vs. PTT Exploration and | Bangchak Public vs. PTG Energy PCL |
| Sakol Energy vs. Bangchak Public | Sakol Energy vs. IRPC Public | Sakol Energy vs. PTT Exploration and | Sakol Energy vs. PTG Energy PCL |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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