Correlation Between Bangkok Dusit and President Bakery
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and President Bakery 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 President Bakery 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 President Bakery Public, you can compare the effects of market volatilities on Bangkok Dusit and President Bakery 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 President Bakery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and President Bakery.
Diversification Opportunities for Bangkok Dusit and President Bakery
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bangkok and President is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and President Bakery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Bakery 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 President Bakery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Bakery Public has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and President Bakery go up and down completely randomly.
Pair Corralation between Bangkok Dusit and President Bakery
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to generate 2.03 times more return on investment than President Bakery. However, Bangkok Dusit is 2.03 times more volatile than President Bakery Public. It trades about -0.01 of its potential returns per unit of risk. President Bakery Public is currently generating about -0.06 per unit of risk. If you would invest 2,697 in Bangkok Dusit Medical on September 12, 2024 and sell it today you would lose (172.00) from holding Bangkok Dusit Medical or give up 6.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. President Bakery Public
Performance |
| Timeline |
| Bangkok Dusit Medical |
| President Bakery Public |
Bangkok Dusit and President Bakery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and President Bakery
The main advantage of trading using opposite Bangkok Dusit and President Bakery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, President Bakery 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 President Bakery will offset losses from the drop in President Bakery'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 |
| President Bakery vs. GFPT Public | President Bakery vs. Dynasty Ceramic Public | President Bakery vs. Haad Thip Public | President Bakery 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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