Correlation Between Bangkok Dusit and Home Product
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Home Product 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 Home Product 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 Home Product Center, you can compare the effects of market volatilities on Bangkok Dusit and Home Product 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 Home Product. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Home Product.
Diversification Opportunities for Bangkok Dusit and Home Product
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bangkok and Home is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Home Product Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Product Center 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 Home Product. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Product Center has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Home Product go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Home Product
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to generate 0.8 times more return on investment than Home Product. However, Bangkok Dusit Medical is 1.24 times less risky than Home Product. It trades about 0.0 of its potential returns per unit of risk. Home Product Center is currently generating about -0.04 per unit of risk. If you would invest 2,673 in Bangkok Dusit Medical on August 28, 2024 and sell it today you would lose (48.00) from holding Bangkok Dusit Medical or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. Home Product Center
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Home Product Center |
Bangkok Dusit and Home Product Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Home Product
The main advantage of trading using opposite Bangkok Dusit and Home Product positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Home Product 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 Home Product will offset losses from the drop in Home Product'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 |
| Home Product vs. SCB X Public | Home Product vs. Kasikornbank Public | Home Product vs. PTT Public | Home Product vs. Kasikornbank 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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