Correlation Between Bangkok Dusit and Ekarat Engineering
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Ekarat Engineering 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 Ekarat Engineering 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 Ekarat Engineering Public, you can compare the effects of market volatilities on Bangkok Dusit and Ekarat Engineering 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 Ekarat Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Ekarat Engineering.
Diversification Opportunities for Bangkok Dusit and Ekarat Engineering
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bangkok and Ekarat is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Ekarat Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekarat Engineering Public 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 Ekarat Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekarat Engineering Public has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Ekarat Engineering go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Ekarat Engineering
Assuming the 90 days trading horizon Bangkok Dusit is expected to generate 344.34 times less return on investment than Ekarat Engineering. But when comparing it to its historical volatility, Bangkok Dusit Medical is 47.61 times less risky than Ekarat Engineering. It trades about 0.01 of its potential returns per unit of risk. Ekarat Engineering Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 76.00 in Ekarat Engineering Public on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Ekarat Engineering Public or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. Ekarat Engineering Public
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Ekarat Engineering Public |
Bangkok Dusit and Ekarat Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Ekarat Engineering
The main advantage of trading using opposite Bangkok Dusit and Ekarat Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Ekarat Engineering 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 Ekarat Engineering will offset losses from the drop in Ekarat Engineering's long position.| Bangkok Dusit vs. Bumrungrad Hospital Public | Bangkok Dusit vs. Bangkok Chain Hospital | Bangkok Dusit vs. Ramkhamhaeng Hospital Public | Bangkok Dusit vs. Vibhavadi Medical Center |
| Ekarat Engineering vs. Kasikornbank Public | Ekarat Engineering vs. Siamgas and Petrochemicals | Ekarat Engineering vs. Rich Sport Public | Ekarat Engineering vs. Bangkok Bank 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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