Correlation Between Bangkok Dusit and Khon Kaen
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Khon Kaen 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 Khon Kaen 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 Khon Kaen Sugar, you can compare the effects of market volatilities on Bangkok Dusit and Khon Kaen 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 Khon Kaen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Khon Kaen.
Diversification Opportunities for Bangkok Dusit and Khon Kaen
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bangkok and Khon is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Khon Kaen Sugar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khon Kaen Sugar 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 Khon Kaen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khon Kaen Sugar has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Khon Kaen go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Khon Kaen
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to under-perform the Khon Kaen. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Dusit Medical is 34.79 times less risky than Khon Kaen. The stock trades about -0.01 of its potential returns per unit of risk. The Khon Kaen Sugar is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 354.00 in Khon Kaen Sugar on September 12, 2024 and sell it today you would lose (155.00) from holding Khon Kaen Sugar or give up 43.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. Khon Kaen Sugar
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Khon Kaen Sugar |
Bangkok Dusit and Khon Kaen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Khon Kaen
The main advantage of trading using opposite Bangkok Dusit and Khon Kaen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Khon Kaen 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 Khon Kaen will offset losses from the drop in Khon Kaen'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 |
| Khon Kaen vs. GFPT Public | Khon Kaen vs. Dynasty Ceramic Public | Khon Kaen vs. Haad Thip Public | Khon Kaen vs. The Erawan Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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