Correlation Between Bangkok Dusit and Asia Hotel
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Asia Hotel 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 Asia Hotel 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 Asia Hotel Public, you can compare the effects of market volatilities on Bangkok Dusit and Asia Hotel 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 Asia Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Asia Hotel.
Diversification Opportunities for Bangkok Dusit and Asia Hotel
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bangkok and Asia is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Asia Hotel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Hotel 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 Asia Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Hotel Public has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Asia Hotel go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Asia Hotel
Assuming the 90 days trading horizon Bangkok Dusit is expected to generate 322.66 times less return on investment than Asia Hotel. But when comparing it to its historical volatility, Bangkok Dusit Medical is 67.43 times less risky than Asia Hotel. It trades about 0.02 of its potential returns per unit of risk. Asia Hotel Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 622.00 in Asia Hotel Public on September 4, 2024 and sell it today you would earn a total of 38.00 from holding Asia Hotel Public or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. Asia Hotel Public
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Asia Hotel Public |
Bangkok Dusit and Asia Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Asia Hotel
The main advantage of trading using opposite Bangkok Dusit and Asia Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Asia Hotel 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 Asia Hotel will offset losses from the drop in Asia Hotel's long position.| Bangkok Dusit vs. CP ALL Public | Bangkok Dusit vs. Central Pattana Public | Bangkok Dusit vs. Airports of Thailand | Bangkok Dusit vs. Kasikornbank Public |
| Asia Hotel vs. Central Pattana Public | Asia Hotel vs. CP ALL Public | Asia Hotel vs. Bangkok Dusit Medical | Asia Hotel vs. Airports of Thailand |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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