Correlation Between BPS TECHNOLOGY and Thai Life
Can any of the company-specific risk be diversified away by investing in both BPS TECHNOLOGY and Thai Life 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 Life 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 Life Insurance, you can compare the effects of market volatilities on BPS TECHNOLOGY and Thai Life 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 Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of BPS TECHNOLOGY and Thai Life.
Diversification Opportunities for BPS TECHNOLOGY and Thai Life
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between BPS and Thai is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BPS TECHNOLOGY PUBLIC and Thai Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Life Insurance 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 Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Life Insurance has no effect on the direction of BPS TECHNOLOGY i.e., BPS TECHNOLOGY and Thai Life go up and down completely randomly.
Pair Corralation between BPS TECHNOLOGY and Thai Life
Assuming the 90 days trading horizon BPS TECHNOLOGY PUBLIC is expected to under-perform the Thai Life. In addition to that, BPS TECHNOLOGY is 1.53 times more volatile than Thai Life Insurance. It trades about -0.18 of its total potential returns per unit of risk. Thai Life Insurance is currently generating about -0.07 per unit of volatility. If you would invest 1,100 in Thai Life Insurance on August 31, 2024 and sell it today you would lose (50.00) from holding Thai Life Insurance or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BPS TECHNOLOGY PUBLIC vs. Thai Life Insurance
Performance |
| Timeline |
| BPS TECHNOLOGY PUBLIC |
| Thai Life Insurance |
BPS TECHNOLOGY and Thai Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BPS TECHNOLOGY and Thai Life
The main advantage of trading using opposite BPS TECHNOLOGY and Thai Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BPS TECHNOLOGY position performs unexpectedly, Thai Life 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 Life will offset losses from the drop in Thai Life'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 |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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