Correlation Between Bangkok Dusit and TMC Industrial
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and TMC Industrial 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 TMC Industrial 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 TMC Industrial Public, you can compare the effects of market volatilities on Bangkok Dusit and TMC Industrial 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 TMC Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and TMC Industrial.
Diversification Opportunities for Bangkok Dusit and TMC Industrial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bangkok and TMC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and TMC Industrial Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMC Industrial 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 TMC Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMC Industrial Public has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and TMC Industrial go up and down completely randomly.
Pair Corralation between Bangkok Dusit and TMC Industrial
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to generate 0.61 times more return on investment than TMC Industrial. However, Bangkok Dusit Medical is 1.63 times less risky than TMC Industrial. It trades about -0.25 of its potential returns per unit of risk. TMC Industrial Public is currently generating about -0.18 per unit of risk. If you would invest 3,000 in Bangkok Dusit Medical on August 29, 2024 and sell it today you would lose (425.00) from holding Bangkok Dusit Medical or give up 14.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. TMC Industrial Public
Performance |
| Timeline |
| Bangkok Dusit Medical |
| TMC Industrial Public |
Bangkok Dusit and TMC Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and TMC Industrial
The main advantage of trading using opposite Bangkok Dusit and TMC Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, TMC Industrial 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 TMC Industrial will offset losses from the drop in TMC Industrial'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 |
| TMC Industrial vs. Home Pottery Public | TMC Industrial vs. Thanapiriya Public | TMC Industrial vs. The Erawan Group | TMC Industrial vs. Ditto Public |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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