Correlation Between Bangkok Life and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both Bangkok Life 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 Bangkok Life and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Life Assurance and Bangkok Bank Public, you can compare the effects of market volatilities on Bangkok Life 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 Bangkok Life with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Life and Bangkok Bank.
Diversification Opportunities for Bangkok Life and Bangkok Bank
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bangkok and Bangkok is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Life Assurance 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 Bangkok Life 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 Life Assurance 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 Bangkok Life i.e., Bangkok Life and Bangkok Bank go up and down completely randomly.
Pair Corralation between Bangkok Life and Bangkok Bank
Assuming the 90 days trading horizon Bangkok Life Assurance is expected to under-perform the Bangkok Bank. In addition to that, Bangkok Life is 1.86 times more volatile than Bangkok Bank Public. It trades about -0.02 of its total potential returns per unit of risk. Bangkok Bank Public is currently generating about 0.03 per unit of volatility. If you would invest 13,137 in Bangkok Bank Public on August 29, 2024 and sell it today you would earn a total of 1,563 from holding Bangkok Bank Public or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Life Assurance vs. Bangkok Bank Public
Performance |
| Timeline |
| Bangkok Life Assurance |
| Bangkok Bank Public |
Bangkok Life and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Life and Bangkok Bank
The main advantage of trading using opposite Bangkok Life and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Life 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.| Bangkok Life vs. Karmarts Public | Bangkok Life vs. Kang Yong Electric | Bangkok Life vs. Kiatnakin Phatra Bank | Bangkok Life vs. SCG PACKAGING PCL NVDR |
| Bangkok Bank vs. Karmarts Public | Bangkok Bank vs. Kang Yong Electric | Bangkok Bank vs. Kiatnakin Phatra Bank | Bangkok Bank vs. SCG PACKAGING PCL NVDR |
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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