Correlation Between BEC World and Jasmine International
Can any of the company-specific risk be diversified away by investing in both BEC World and Jasmine International 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 BEC World and Jasmine International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEC World Public and Jasmine International Public, you can compare the effects of market volatilities on BEC World and Jasmine International 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 BEC World with a short position of Jasmine International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEC World and Jasmine International.
Diversification Opportunities for BEC World and Jasmine International
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BEC and Jasmine is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding BEC World Public and Jasmine International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasmine International and BEC World 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 BEC World Public are associated (or correlated) with Jasmine International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasmine International has no effect on the direction of BEC World i.e., BEC World and Jasmine International go up and down completely randomly.
Pair Corralation between BEC World and Jasmine International
Assuming the 90 days trading horizon BEC World Public is expected to under-perform the Jasmine International. But the stock apears to be less risky and, when comparing its historical volatility, BEC World Public is 1.37 times less risky than Jasmine International. The stock trades about -0.21 of its potential returns per unit of risk. The Jasmine International Public is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 222.00 in Jasmine International Public on August 29, 2024 and sell it today you would earn a total of 12.00 from holding Jasmine International Public or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEC World Public vs. Jasmine International Public
Performance |
| Timeline |
| BEC World Public |
| Jasmine International |
BEC World and Jasmine International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEC World and Jasmine International
The main advantage of trading using opposite BEC World and Jasmine International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEC World position performs unexpectedly, Jasmine International 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 Jasmine International will offset losses from the drop in Jasmine International's long position.| BEC World vs. Land and Houses | BEC World vs. AP Public | BEC World vs. Bangkok Bank Public | BEC World vs. Charoen Pokphand Foods |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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