Correlation Between Business Online and Premier Technology
Can any of the company-specific risk be diversified away by investing in both Business Online and Premier Technology 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 Business Online and Premier Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Business Online PCL and Premier Technology Public, you can compare the effects of market volatilities on Business Online and Premier Technology 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 Business Online with a short position of Premier Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Business Online and Premier Technology.
Diversification Opportunities for Business Online and Premier Technology
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Business and Premier is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Business Online PCL and Premier Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Technology Public and Business Online 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 Business Online PCL are associated (or correlated) with Premier Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Technology Public has no effect on the direction of Business Online i.e., Business Online and Premier Technology go up and down completely randomly.
Pair Corralation between Business Online and Premier Technology
Assuming the 90 days trading horizon Business Online PCL is expected to under-perform the Premier Technology. In addition to that, Business Online is 2.23 times more volatile than Premier Technology Public. It trades about -0.31 of its total potential returns per unit of risk. Premier Technology Public is currently generating about -0.13 per unit of volatility. If you would invest 970.00 in Premier Technology Public on September 1, 2024 and sell it today you would lose (25.00) from holding Premier Technology Public or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Business Online PCL vs. Premier Technology Public
Performance |
| Timeline |
| Business Online PCL |
| Premier Technology Public |
Business Online and Premier Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Business Online and Premier Technology
The main advantage of trading using opposite Business Online and Premier Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Business Online position performs unexpectedly, Premier Technology 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 Premier Technology will offset losses from the drop in Premier Technology's long position.| Business Online vs. Premier Technology Public | Business Online vs. Sea Oil Public | Business Online vs. Thai Mitsuwa Public | Business Online vs. The Erawan Group |
| Premier Technology vs. AP Public | Premier Technology vs. Jasmine International Public | Premier Technology vs. Asia Plus Group | Premier Technology vs. Bangchak 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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