Correlation Between BTS Group and Home Product
Can any of the company-specific risk be diversified away by investing in both BTS Group and Home Product 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 Home Product 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 Home Product Center, you can compare the effects of market volatilities on BTS Group and Home Product 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 Home Product. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTS Group and Home Product.
Diversification Opportunities for BTS Group and Home Product
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between BTS and Home is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding BTS Group Holdings and Home Product Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Product Center 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 Home Product. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Product Center has no effect on the direction of BTS Group i.e., BTS Group and Home Product go up and down completely randomly.
Pair Corralation between BTS Group and Home Product
Assuming the 90 days trading horizon BTS Group Holdings is expected to generate 1.27 times more return on investment than Home Product. However, BTS Group is 1.27 times more volatile than Home Product Center. It trades about -0.03 of its potential returns per unit of risk. Home Product Center is currently generating about -0.04 per unit of risk. If you would invest 799.00 in BTS Group Holdings on August 30, 2024 and sell it today you would lose (249.00) from holding BTS Group Holdings or give up 31.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTS Group Holdings vs. Home Product Center
Performance |
| Timeline |
| BTS Group Holdings |
| Home Product Center |
BTS Group and Home Product Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTS Group and Home Product
The main advantage of trading using opposite BTS Group and Home Product positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTS Group position performs unexpectedly, Home Product 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 Home Product will offset losses from the drop in Home Product'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 |
| Home Product vs. CP ALL Public | Home Product vs. Bangkok Dusit Medical | Home Product vs. Central Pattana Public | Home Product vs. Advanced Info Service |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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