Correlation Between BCPG Public and Prime Road
Can any of the company-specific risk be diversified away by investing in both BCPG Public and Prime Road 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 Prime Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCPG Public and Prime Road Power, you can compare the effects of market volatilities on BCPG Public and Prime Road 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 Prime Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCPG Public and Prime Road.
Diversification Opportunities for BCPG Public and Prime Road
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between BCPG and Prime is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BCPG Public and Prime Road Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Road Power 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 Prime Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Road Power has no effect on the direction of BCPG Public i.e., BCPG Public and Prime Road go up and down completely randomly.
Pair Corralation between BCPG Public and Prime Road
Assuming the 90 days trading horizon BCPG Public is expected to generate 0.4 times more return on investment than Prime Road. However, BCPG Public is 2.5 times less risky than Prime Road. It trades about 0.23 of its potential returns per unit of risk. Prime Road Power is currently generating about -0.37 per unit of risk. If you would invest 520.00 in BCPG Public on October 20, 2024 and sell it today you would earn a total of 100.00 from holding BCPG Public or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCPG Public vs. Prime Road Power
Performance |
| Timeline |
| BCPG Public |
| Prime Road Power |
BCPG Public and Prime Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCPG Public and Prime Road
The main advantage of trading using opposite BCPG Public and Prime Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCPG Public position performs unexpectedly, Prime Road 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 Prime Road will offset losses from the drop in Prime Road'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 |
| Prime Road vs. BCPG Public | Prime Road vs. CK Power Public | Prime Road vs. TPI Polene Power | Prime Road vs. Earth Tech Environment |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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