Correlation Between Bangkok Dusit and Karmarts Public
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Karmarts Public 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 Karmarts Public 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 Karmarts Public, you can compare the effects of market volatilities on Bangkok Dusit and Karmarts Public 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 Karmarts Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Karmarts Public.
Diversification Opportunities for Bangkok Dusit and Karmarts Public
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bangkok and Karmarts is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Karmarts Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karmarts 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 Karmarts Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karmarts Public has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Karmarts Public go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Karmarts Public
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to under-perform the Karmarts Public. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Dusit Medical is 2.23 times less risky than Karmarts Public. The stock trades about -0.15 of its potential returns per unit of risk. The Karmarts Public is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,150 in Karmarts Public on September 5, 2024 and sell it today you would lose (10.00) from holding Karmarts Public or give up 0.87% 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. Karmarts Public
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Karmarts Public |
Bangkok Dusit and Karmarts Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Karmarts Public
The main advantage of trading using opposite Bangkok Dusit and Karmarts Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Karmarts Public 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 Karmarts Public will offset losses from the drop in Karmarts Public'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 |
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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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