Correlation Between BPS TECHNOLOGY and Thai Coating
Can any of the company-specific risk be diversified away by investing in both BPS TECHNOLOGY and Thai Coating 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 Thai Coating 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 Thai Coating Industrial, you can compare the effects of market volatilities on BPS TECHNOLOGY and Thai Coating 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 Thai Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of BPS TECHNOLOGY and Thai Coating.
Diversification Opportunities for BPS TECHNOLOGY and Thai Coating
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BPS and Thai is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BPS TECHNOLOGY PUBLIC and Thai Coating Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Coating Industrial 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 Thai Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Coating Industrial has no effect on the direction of BPS TECHNOLOGY i.e., BPS TECHNOLOGY and Thai Coating go up and down completely randomly.
Pair Corralation between BPS TECHNOLOGY and Thai Coating
Assuming the 90 days trading horizon BPS TECHNOLOGY PUBLIC is expected to under-perform the Thai Coating. But the stock apears to be less risky and, when comparing its historical volatility, BPS TECHNOLOGY PUBLIC is 1.24 times less risky than Thai Coating. The stock trades about -0.05 of its potential returns per unit of risk. The Thai Coating Industrial is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Thai Coating Industrial on September 2, 2024 and sell it today you would earn a total of 250.00 from holding Thai Coating Industrial or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
BPS TECHNOLOGY PUBLIC vs. Thai Coating Industrial
Performance |
| Timeline |
| BPS TECHNOLOGY PUBLIC |
| Thai Coating Industrial |
BPS TECHNOLOGY and Thai Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BPS TECHNOLOGY and Thai Coating
The main advantage of trading using opposite BPS TECHNOLOGY and Thai Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BPS TECHNOLOGY position performs unexpectedly, Thai Coating 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 Thai Coating will offset losses from the drop in Thai Coating's long position.| BPS TECHNOLOGY vs. AP Public | BPS TECHNOLOGY vs. TRC Construction Public | BPS TECHNOLOGY vs. Bangkok Expressway and | BPS TECHNOLOGY vs. Lohakit Metal Public |
| Thai Coating vs. AAPICO Hitech Public | Thai Coating vs. AP Public | Thai Coating vs. Aikchol Hospital Public | Thai Coating vs. Bank of Ayudhya |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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