Correlation Between Bangkok Expressway and TRC Construction
Can any of the company-specific risk be diversified away by investing in both Bangkok Expressway and TRC Construction 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 TRC Construction 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 TRC Construction Public, you can compare the effects of market volatilities on Bangkok Expressway and TRC Construction 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 TRC Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Expressway and TRC Construction.
Diversification Opportunities for Bangkok Expressway and TRC Construction
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bangkok and TRC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Expressway and and TRC Construction Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRC Construction Public 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 TRC Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRC Construction Public has no effect on the direction of Bangkok Expressway i.e., Bangkok Expressway and TRC Construction go up and down completely randomly.
Pair Corralation between Bangkok Expressway and TRC Construction
Assuming the 90 days trading horizon Bangkok Expressway is expected to generate 12.08 times less return on investment than TRC Construction. But when comparing it to its historical volatility, Bangkok Expressway and is 7.56 times less risky than TRC Construction. It trades about 0.06 of its potential returns per unit of risk. TRC Construction Public is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 54.00 in TRC Construction Public on January 12, 2025 and sell it today you would earn a total of 6.00 from holding TRC Construction Public or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Expressway and vs. TRC Construction Public
Performance |
| Timeline |
| Bangkok Expressway and |
| TRC Construction Public |
Bangkok Expressway and TRC Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Expressway and TRC Construction
The main advantage of trading using opposite Bangkok Expressway and TRC Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Expressway position performs unexpectedly, TRC Construction 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 TRC Construction will offset losses from the drop in TRC Construction'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 |
| TRC Construction vs. WICE Logistics PCL | TRC Construction vs. Asia Aviation Public | TRC Construction vs. Humanica Public | TRC Construction vs. Jay Mart Public |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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