Correlation Between BCPG Public and Global Power
Can any of the company-specific risk be diversified away by investing in both BCPG Public and Global Power 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 BCPG Public and Global Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCPG Public and Global Power Synergy, you can compare the effects of market volatilities on BCPG Public and Global Power 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 BCPG Public with a short position of Global Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCPG Public and Global Power.
Diversification Opportunities for BCPG Public and Global Power
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BCPG and Global is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding BCPG Public and Global Power Synergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Power Synergy and BCPG 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 BCPG Public are associated (or correlated) with Global Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Power Synergy has no effect on the direction of BCPG Public i.e., BCPG Public and Global Power go up and down completely randomly.
Pair Corralation between BCPG Public and Global Power
Assuming the 90 days trading horizon BCPG Public is expected to under-perform the Global Power. In addition to that, BCPG Public is 1.15 times more volatile than Global Power Synergy. It trades about -0.28 of its total potential returns per unit of risk. Global Power Synergy is currently generating about -0.06 per unit of volatility. If you would invest 4,625 in Global Power Synergy on August 25, 2024 and sell it today you would lose (275.00) from holding Global Power Synergy or give up 5.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCPG Public vs. Global Power Synergy
Performance |
| Timeline |
| BCPG Public |
| Global Power Synergy |
BCPG Public and Global Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCPG Public and Global Power
The main advantage of trading using opposite BCPG Public and Global Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCPG Public position performs unexpectedly, Global Power 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 Global Power will offset losses from the drop in Global Power's long position.| BCPG Public vs. Bangchak Public | BCPG Public vs. Gulf Energy Development | BCPG Public vs. Global Power Synergy | BCPG Public vs. Bangkok Expressway and |
| Global Power vs. Gulf Energy Development | Global Power vs. Energy Absolute Public | Global Power vs. BGrimm Power Public | Global Power vs. CP ALL 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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