Correlation Between Bangkok Bank and BDO Unibank
Can any of the company-specific risk be diversified away by investing in both Bangkok Bank and BDO Unibank 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 Bank and BDO Unibank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Bank PCL and BDO Unibank ADR, you can compare the effects of market volatilities on Bangkok Bank and BDO Unibank 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 Bank with a short position of BDO Unibank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and BDO Unibank.
Diversification Opportunities for Bangkok Bank and BDO Unibank
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bangkok and BDO is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank PCL and BDO Unibank ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDO Unibank ADR and Bangkok Bank 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 Bank PCL are associated (or correlated) with BDO Unibank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BDO Unibank ADR has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and BDO Unibank go up and down completely randomly.
Pair Corralation between Bangkok Bank and BDO Unibank
Assuming the 90 days horizon Bangkok Bank PCL is expected to generate 1.6 times more return on investment than BDO Unibank. However, Bangkok Bank is 1.6 times more volatile than BDO Unibank ADR. It trades about 0.04 of its potential returns per unit of risk. BDO Unibank ADR is currently generating about 0.01 per unit of risk. If you would invest 1,916 in Bangkok Bank PCL on October 24, 2024 and sell it today you would earn a total of 445.00 from holding Bangkok Bank PCL or generate 23.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Bank PCL vs. BDO Unibank ADR
Performance |
| Timeline |
| Bangkok Bank PCL |
| BDO Unibank ADR |
Bangkok Bank and BDO Unibank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Bank and BDO Unibank
The main advantage of trading using opposite Bangkok Bank and BDO Unibank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank position performs unexpectedly, BDO Unibank 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 BDO Unibank will offset losses from the drop in BDO Unibank's long position.| Bangkok Bank vs. Partners Bank of | Bangkok Bank vs. BOC Hong Kong | Bangkok Bank vs. China Merchants Bank | Bangkok Bank vs. Bank of the |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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