Correlation Between BCPG Public and IRPC Public
Can any of the company-specific risk be diversified away by investing in both BCPG Public and IRPC Public 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 IRPC Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCPG Public and IRPC Public, you can compare the effects of market volatilities on BCPG Public and IRPC Public 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 IRPC Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCPG Public and IRPC Public.
Diversification Opportunities for BCPG Public and IRPC Public
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BCPG and IRPC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding BCPG Public and IRPC Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRPC Public 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 IRPC Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRPC Public has no effect on the direction of BCPG Public i.e., BCPG Public and IRPC Public go up and down completely randomly.
Pair Corralation between BCPG Public and IRPC Public
Assuming the 90 days trading horizon BCPG Public is expected to under-perform the IRPC Public. But the stock apears to be less risky and, when comparing its historical volatility, BCPG Public is 1.03 times less risky than IRPC Public. The stock trades about -0.54 of its potential returns per unit of risk. The IRPC Public is currently generating about -0.28 of returns per unit of risk over similar time horizon. If you would invest 152.00 in IRPC Public on September 2, 2024 and sell it today you would lose (14.00) from holding IRPC Public or give up 9.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCPG Public vs. IRPC Public
Performance |
| Timeline |
| BCPG Public |
| IRPC Public |
BCPG Public and IRPC Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCPG Public and IRPC Public
The main advantage of trading using opposite BCPG Public and IRPC Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCPG Public position performs unexpectedly, IRPC Public 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 IRPC Public will offset losses from the drop in IRPC Public'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 |
| IRPC Public vs. Sawang Export Public | IRPC Public vs. Quality Houses Hotel | IRPC Public vs. Grande Hospitality Real | IRPC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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