Correlation Between Bangkok Dusit and Land
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Land 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 Land 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 Land and Houses, you can compare the effects of market volatilities on Bangkok Dusit and Land 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 Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Land.
Diversification Opportunities for Bangkok Dusit and Land
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bangkok and Land is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Land and Houses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land and Houses 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 Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land and Houses has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Land go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Land
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to under-perform the Land. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Dusit Medical is 1.01 times less risky than Land. The stock trades about -0.23 of its potential returns per unit of risk. The Land and Houses is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 554.00 in Land and Houses on August 31, 2024 and sell it today you would lose (24.00) from holding Land and Houses or give up 4.33% 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. Land and Houses
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Land and Houses |
Bangkok Dusit and Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Land
The main advantage of trading using opposite Bangkok Dusit and Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Land 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 Land will offset losses from the drop in Land's long position.| Bangkok Dusit vs. AP Public | Bangkok Dusit vs. Bumrungrad Hospital Public | Bangkok Dusit vs. Advanced Information Technology | Bangkok Dusit vs. AJ Plast Public |
| Land vs. Quality Houses Public | Land vs. Bangkok Bank Public | Land vs. Siri Prime Office | Land vs. Charoen Pokphand Foods |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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