Correlation Between BPS TECHNOLOGY and Somboon Advance
Can any of the company-specific risk be diversified away by investing in both BPS TECHNOLOGY and Somboon Advance 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 BPS TECHNOLOGY and Somboon Advance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BPS TECHNOLOGY PUBLIC and Somboon Advance Technology, you can compare the effects of market volatilities on BPS TECHNOLOGY and Somboon Advance 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 BPS TECHNOLOGY with a short position of Somboon Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BPS TECHNOLOGY and Somboon Advance.
Diversification Opportunities for BPS TECHNOLOGY and Somboon Advance
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BPS and Somboon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding BPS TECHNOLOGY PUBLIC and Somboon Advance Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Somboon Advance Tech and BPS TECHNOLOGY 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 BPS TECHNOLOGY PUBLIC are associated (or correlated) with Somboon Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Somboon Advance Tech has no effect on the direction of BPS TECHNOLOGY i.e., BPS TECHNOLOGY and Somboon Advance go up and down completely randomly.
Pair Corralation between BPS TECHNOLOGY and Somboon Advance
Assuming the 90 days trading horizon BPS TECHNOLOGY PUBLIC is expected to generate 2.48 times more return on investment than Somboon Advance. However, BPS TECHNOLOGY is 2.48 times more volatile than Somboon Advance Technology. It trades about -0.03 of its potential returns per unit of risk. Somboon Advance Technology is currently generating about -0.14 per unit of risk. If you would invest 53.00 in BPS TECHNOLOGY PUBLIC on October 7, 2024 and sell it today you would lose (2.00) from holding BPS TECHNOLOGY PUBLIC or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BPS TECHNOLOGY PUBLIC vs. Somboon Advance Technology
Performance |
| Timeline |
| BPS TECHNOLOGY PUBLIC |
| Somboon Advance Tech |
BPS TECHNOLOGY and Somboon Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BPS TECHNOLOGY and Somboon Advance
The main advantage of trading using opposite BPS TECHNOLOGY and Somboon Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BPS TECHNOLOGY position performs unexpectedly, Somboon Advance 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 Somboon Advance will offset losses from the drop in Somboon Advance's long position.| BPS TECHNOLOGY vs. The Navakij Insurance | BPS TECHNOLOGY vs. Taokaenoi Food Marketing | BPS TECHNOLOGY vs. Tipco Foods Public | BPS TECHNOLOGY vs. Surapon Foods Public |
| Somboon Advance vs. AAPICO Hitech Public | Somboon Advance vs. Thai Stanley Electric | Somboon Advance vs. Hana Microelectronics Public | Somboon Advance vs. TISCO Financial Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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