Correlation Between BOC Hong and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both BOC Hong and Bangkok Bank 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 BOC Hong and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOC Hong Kong and Bangkok Bank Public, you can compare the effects of market volatilities on BOC Hong and Bangkok Bank 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 BOC Hong with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOC Hong and Bangkok Bank.
Diversification Opportunities for BOC Hong and Bangkok Bank
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BOC and Bangkok is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding BOC Hong Kong and Bangkok Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Bank Public and BOC Hong 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 BOC Hong Kong are associated (or correlated) with Bangkok Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Bank Public has no effect on the direction of BOC Hong i.e., BOC Hong and Bangkok Bank go up and down completely randomly.
Pair Corralation between BOC Hong and Bangkok Bank
Assuming the 90 days horizon BOC Hong Kong is expected to generate 0.54 times more return on investment than Bangkok Bank. However, BOC Hong Kong is 1.86 times less risky than Bangkok Bank. It trades about -0.03 of its potential returns per unit of risk. Bangkok Bank Public is currently generating about -0.02 per unit of risk. If you would invest 6,549 in BOC Hong Kong on September 22, 2024 and sell it today you would lose (87.00) from holding BOC Hong Kong or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOC Hong Kong vs. Bangkok Bank Public
Performance |
| Timeline |
| BOC Hong Kong |
| Bangkok Bank Public |
BOC Hong and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOC Hong and Bangkok Bank
The main advantage of trading using opposite BOC Hong and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOC Hong position performs unexpectedly, Bangkok Bank 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 Bangkok Bank will offset losses from the drop in Bangkok Bank's long position.| BOC Hong vs. Banco Bradesco SA | BOC Hong vs. Itau Unibanco Banco | BOC Hong vs. Lloyds Banking Group | BOC Hong vs. Deutsche Bank AG |
| Bangkok Bank vs. Bank of the | Bangkok Bank vs. BOC Hong Kong | Bangkok Bank vs. China Merchants Bank | Bangkok Bank vs. BDO Unibank ADR |
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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