Correlation Between BEC World and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both BEC World 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 BEC World and Thoresen Thai 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 Thoresen Thai Agencies, you can compare the effects of market volatilities on BEC World 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 BEC World with a short position of Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEC World and Thoresen Thai.
Diversification Opportunities for BEC World and Thoresen Thai
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BEC and Thoresen is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding BEC World Public 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 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 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 BEC World i.e., BEC World and Thoresen Thai go up and down completely randomly.
Pair Corralation between BEC World and Thoresen Thai
Assuming the 90 days trading horizon BEC World Public is expected to generate 19.24 times more return on investment than Thoresen Thai. However, BEC World is 19.24 times more volatile than Thoresen Thai Agencies. It trades about 0.04 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 938.00 in BEC World Public on September 12, 2024 and sell it today you would lose (532.00) from holding BEC World Public or give up 56.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEC World Public vs. Thoresen Thai Agencies
Performance |
| Timeline |
| BEC World Public |
| Thoresen Thai Agencies |
BEC World and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEC World and Thoresen Thai
The main advantage of trading using opposite BEC World and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEC World 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.| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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