Correlation Between Bangkok Dusit and Ocean Glass
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Ocean Glass 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 Ocean Glass 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 Ocean Glass Public, you can compare the effects of market volatilities on Bangkok Dusit and Ocean Glass 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 Ocean Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Ocean Glass.
Diversification Opportunities for Bangkok Dusit and Ocean Glass
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bangkok and Ocean is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Ocean Glass Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Glass 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 Ocean Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Glass Public has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Ocean Glass go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Ocean Glass
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to generate 1.07 times more return on investment than Ocean Glass. However, Bangkok Dusit is 1.07 times more volatile than Ocean Glass Public. It trades about -0.15 of its potential returns per unit of risk. Ocean Glass Public is currently generating about -0.49 per unit of risk. If you would invest 2,750 in Bangkok Dusit Medical on September 4, 2024 and sell it today you would lose (150.00) from holding Bangkok Dusit Medical or give up 5.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. Ocean Glass Public
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Ocean Glass Public |
Bangkok Dusit and Ocean Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Ocean Glass
The main advantage of trading using opposite Bangkok Dusit and Ocean Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Ocean Glass 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 Ocean Glass will offset losses from the drop in Ocean Glass' long position.| Bangkok Dusit vs. CP ALL Public | Bangkok Dusit vs. Central Pattana Public | Bangkok Dusit vs. Airports of Thailand | Bangkok Dusit vs. Kasikornbank Public |
| Ocean Glass vs. Central Pattana Public | Ocean Glass vs. CP ALL Public | Ocean Glass vs. Bangkok Dusit Medical | Ocean Glass vs. Airports of Thailand |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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