Correlation Between Bangkok Dusit and China Evergrande
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and China Evergrande 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 China Evergrande 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 China Evergrande New, you can compare the effects of market volatilities on Bangkok Dusit and China Evergrande 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 China Evergrande. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and China Evergrande.
Diversification Opportunities for Bangkok Dusit and China Evergrande
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bangkok and China is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and China Evergrande New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Evergrande New 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 China Evergrande. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Evergrande New has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and China Evergrande go up and down completely randomly.
Pair Corralation between Bangkok Dusit and China Evergrande
Assuming the 90 days horizon Bangkok Dusit Medical is expected to under-perform the China Evergrande. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bangkok Dusit Medical is 84.68 times less risky than China Evergrande. The pink sheet trades about 0.0 of its potential returns per unit of risk. The China Evergrande New is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1.20 in China Evergrande New on September 2, 2024 and sell it today you would earn a total of 0.80 from holding China Evergrande New or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 67.4% |
| Values | Daily Returns |
Bangkok Dusit Medical vs. China Evergrande New
Performance |
| Timeline |
| Bangkok Dusit Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Evergrande New |
Bangkok Dusit and China Evergrande Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and China Evergrande
The main advantage of trading using opposite Bangkok Dusit and China Evergrande positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, China Evergrande 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 China Evergrande will offset losses from the drop in China Evergrande's long position.| Bangkok Dusit vs. Fresenius SE Co | Bangkok Dusit vs. Life Healthcare Group | Bangkok Dusit vs. Select Medical Holdings | Bangkok Dusit vs. Ramsay Health Care |
| China Evergrande vs. Pennant Group | China Evergrande vs. Encompass Health Corp | China Evergrande vs. Enhabit | China Evergrande vs. Concord Medical Services |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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