Correlation Between Bangkok Dusit and Airports
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Airports 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 Airports 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 Airports of Thailand, you can compare the effects of market volatilities on Bangkok Dusit and Airports 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 Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Airports.
Diversification Opportunities for Bangkok Dusit and Airports
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bangkok and Airports is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand 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 Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Airports go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Airports
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to generate 1.15 times more return on investment than Airports. However, Bangkok Dusit is 1.15 times more volatile than Airports of Thailand. It trades about 0.0 of its potential returns per unit of risk. Airports of Thailand is currently generating about -0.03 per unit of risk. If you would invest 2,718 in Bangkok Dusit Medical on August 24, 2024 and sell it today you would lose (68.00) from holding Bangkok Dusit Medical or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. Airports of Thailand
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Airports of Thailand |
Bangkok Dusit and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Airports
The main advantage of trading using opposite Bangkok Dusit and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| Bangkok Dusit vs. Chularat Hospital Public | Bangkok Dusit vs. Ekachai Medical Care | Bangkok Dusit vs. Bangkok Chain Hospital | Bangkok Dusit vs. Srivichaivejvivat Public |
| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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