Correlation Between Bangkok Expressway and Central Plaza
Can any of the company-specific risk be diversified away by investing in both Bangkok Expressway and Central Plaza 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 Expressway and Central Plaza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Expressway and and Central Plaza Hotel, you can compare the effects of market volatilities on Bangkok Expressway and Central Plaza 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 Expressway with a short position of Central Plaza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Expressway and Central Plaza.
Diversification Opportunities for Bangkok Expressway and Central Plaza
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bangkok and Central is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Expressway and and Central Plaza Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Plaza Hotel and Bangkok Expressway 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 Expressway and are associated (or correlated) with Central Plaza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Plaza Hotel has no effect on the direction of Bangkok Expressway i.e., Bangkok Expressway and Central Plaza go up and down completely randomly.
Pair Corralation between Bangkok Expressway and Central Plaza
Assuming the 90 days trading horizon Bangkok Expressway and is expected to generate 0.6 times more return on investment than Central Plaza. However, Bangkok Expressway and is 1.66 times less risky than Central Plaza. It trades about 0.24 of its potential returns per unit of risk. Central Plaza Hotel is currently generating about -0.34 per unit of risk. If you would invest 555.00 in Bangkok Expressway and on January 20, 2025 and sell it today you would earn a total of 45.00 from holding Bangkok Expressway and or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Expressway and vs. Central Plaza Hotel
Performance |
| Timeline |
| Bangkok Expressway and |
| Central Plaza Hotel |
Bangkok Expressway and Central Plaza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Expressway and Central Plaza
The main advantage of trading using opposite Bangkok Expressway and Central Plaza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Expressway position performs unexpectedly, Central Plaza 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 Central Plaza will offset losses from the drop in Central Plaza's long position.| Bangkok Expressway vs. BTS Group Holdings | Bangkok Expressway vs. Bangkok Dusit Medical | Bangkok Expressway vs. Airports of Thailand | Bangkok Expressway vs. CP ALL Public |
| Central Plaza vs. Minor International Public | Central Plaza vs. Central Pattana Public | Central Plaza vs. CP ALL Public | Central Plaza vs. Bangkok Dusit Medical |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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