Correlation Between Bangkok Dusit and Grande Asset
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Grande Asset 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 Grande Asset 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 Grande Asset Hotels, you can compare the effects of market volatilities on Bangkok Dusit and Grande Asset 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 Grande Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Grande Asset.
Diversification Opportunities for Bangkok Dusit and Grande Asset
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bangkok and Grande is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Grande Asset Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Asset Hotels 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 Grande Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Asset Hotels has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Grande Asset go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Grande Asset
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to under-perform the Grande Asset. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Dusit Medical is 35.26 times less risky than Grande Asset. The stock trades about -0.03 of its potential returns per unit of risk. The Grande Asset Hotels is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Grande Asset Hotels on November 27, 2024 and sell it today you would lose (17.00) from holding Grande Asset Hotels or give up 77.27% 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. Grande Asset Hotels
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Grande Asset Hotels |
Bangkok Dusit and Grande Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Grande Asset
The main advantage of trading using opposite Bangkok Dusit and Grande Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Grande Asset 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 Grande Asset will offset losses from the drop in Grande Asset's long position.| Bangkok Dusit vs. Bumrungrad Hospital PCL | Bangkok Dusit vs. Bangkok Chain Hospital | Bangkok Dusit vs. Ramkhamhaeng Hospital Public | Bangkok Dusit vs. Vibhavadi Medical Center |
| Grande Asset vs. Bangkok Chain Hospital | Grande Asset vs. Wattanapat Hospital Trang | Grande Asset vs. MFC Asset Management | Grande Asset vs. Bumrungrad Hospital PCL |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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