Correlation Between BTS Group and Eastern Power
Can any of the company-specific risk be diversified away by investing in both BTS Group and Eastern Power 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 BTS Group and Eastern Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTS Group Holdings and Eastern Power Group, you can compare the effects of market volatilities on BTS Group and Eastern Power 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 BTS Group with a short position of Eastern Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTS Group and Eastern Power.
Diversification Opportunities for BTS Group and Eastern Power
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BTS and Eastern is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BTS Group Holdings and Eastern Power Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Power Group and BTS Group 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 BTS Group Holdings are associated (or correlated) with Eastern Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Power Group has no effect on the direction of BTS Group i.e., BTS Group and Eastern Power go up and down completely randomly.
Pair Corralation between BTS Group and Eastern Power
Assuming the 90 days trading horizon BTS Group Holdings is expected to generate 0.67 times more return on investment than Eastern Power. However, BTS Group Holdings is 1.49 times less risky than Eastern Power. It trades about 0.18 of its potential returns per unit of risk. Eastern Power Group is currently generating about -0.07 per unit of risk. If you would invest 434.00 in BTS Group Holdings on November 2, 2024 and sell it today you would earn a total of 186.00 from holding BTS Group Holdings or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTS Group Holdings vs. Eastern Power Group
Performance |
| Timeline |
| BTS Group Holdings |
| Eastern Power Group |
BTS Group and Eastern Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTS Group and Eastern Power
The main advantage of trading using opposite BTS Group and Eastern Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTS Group position performs unexpectedly, Eastern Power 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 Eastern Power will offset losses from the drop in Eastern Power's long position.| BTS Group vs. Bangkok Expressway and | BTS Group vs. CP ALL Public | BTS Group vs. Airports of Thailand | BTS Group vs. Bangkok Dusit Medical |
| Eastern Power vs. BCPG Public | Eastern Power vs. Diamond Building Products | Eastern Power vs. Earth Tech Environment | Eastern Power vs. TPI Polene Power |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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