Correlation Between Bangkok Dusit and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Thoresen Thai 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 Thoresen Thai 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 Thoresen Thai Agencies, you can compare the effects of market volatilities on Bangkok Dusit and Thoresen Thai 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 Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Thoresen Thai.
Diversification Opportunities for Bangkok Dusit and Thoresen Thai
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bangkok and Thoresen is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Thoresen Thai Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoresen Thai Agencies 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 Thoresen Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoresen Thai Agencies has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Thoresen Thai go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Thoresen Thai
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to generate 0.55 times more return on investment than Thoresen Thai. However, Bangkok Dusit Medical is 1.81 times less risky than Thoresen Thai. It trades about -0.01 of its potential returns per unit of risk. Thoresen Thai Agencies is currently generating about -0.01 per unit of risk. If you would invest 2,718 in Bangkok Dusit Medical on September 13, 2024 and sell it today you would lose (193.00) from holding Bangkok Dusit Medical or give up 7.1% 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. Thoresen Thai Agencies
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Thoresen Thai Agencies |
Bangkok Dusit and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Thoresen Thai
The main advantage of trading using opposite Bangkok Dusit and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Thoresen Thai 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 Thoresen Thai will offset losses from the drop in Thoresen Thai'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 |
| Thoresen Thai vs. Precious Shipping Public | Thoresen Thai vs. Regional Container Lines | Thoresen Thai vs. PTT Public | Thoresen Thai vs. The Siam Cement |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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