Correlation Between Bangkok Dusit and Sriracha Construction
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Sriracha Construction 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 Sriracha Construction 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 Sriracha Construction Public, you can compare the effects of market volatilities on Bangkok Dusit and Sriracha Construction 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 Sriracha Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Sriracha Construction.
Diversification Opportunities for Bangkok Dusit and Sriracha Construction
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bangkok and Sriracha is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Sriracha Construction Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sriracha Construction 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 Sriracha Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sriracha Construction has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Sriracha Construction go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Sriracha Construction
Assuming the 90 days trading horizon Bangkok Dusit is expected to generate 2.15 times less return on investment than Sriracha Construction. But when comparing it to its historical volatility, Bangkok Dusit Medical is 2.35 times less risky than Sriracha Construction. It trades about 0.02 of its potential returns per unit of risk. Sriracha Construction Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 489.00 in Sriracha Construction Public on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Sriracha Construction Public or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. Sriracha Construction Public
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Sriracha Construction |
Bangkok Dusit and Sriracha Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Sriracha Construction
The main advantage of trading using opposite Bangkok Dusit and Sriracha Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Sriracha Construction 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 Sriracha Construction will offset losses from the drop in Sriracha Construction's 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 |
| Sriracha Construction vs. Asia Aviation Public | Sriracha Construction vs. Bangkok Dusit Medical | Sriracha Construction vs. Bangkok Expressway and | Sriracha Construction 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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