Correlation Between Bangkok Dusit and Siam Cement
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Siam Cement 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 Bangkok Dusit and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Dusit Medical and The Siam Cement, you can compare the effects of market volatilities on Bangkok Dusit and Siam Cement 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 Bangkok Dusit with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Siam Cement.
Diversification Opportunities for Bangkok Dusit and Siam Cement
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bangkok and Siam is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and Bangkok Dusit 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 Bangkok Dusit Medical are associated (or correlated) with Siam Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Cement has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Siam Cement go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Siam Cement
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to generate 0.19 times more return on investment than Siam Cement. However, Bangkok Dusit Medical is 5.15 times less risky than Siam Cement. It trades about -0.21 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.21 per unit of risk. If you would invest 2,800 in Bangkok Dusit Medical on August 29, 2024 and sell it today you would lose (225.00) from holding Bangkok Dusit Medical or give up 8.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. The Siam Cement
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Siam Cement |
Bangkok Dusit and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Siam Cement
The main advantage of trading using opposite Bangkok Dusit and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Siam Cement 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 Siam Cement will offset losses from the drop in Siam Cement's long position.| Bangkok Dusit vs. Syntec Construction Public | Bangkok Dusit vs. Quality Construction Products | Bangkok Dusit vs. Turnkey Communication Services | Bangkok Dusit vs. CHUWIT FARM PUBLIC |
| Siam Cement vs. Megachem Public | Siam Cement vs. SCG PACKAGING PCL NVDR | Siam Cement vs. CK Power Public | Siam Cement vs. Thai Metal Drum |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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