Correlation Between Better World and Bangkok Chain
Can any of the company-specific risk be diversified away by investing in both Better World and Bangkok Chain 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 Better World and Bangkok Chain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Better World Green and Bangkok Chain Hospital, you can compare the effects of market volatilities on Better World and Bangkok Chain 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 Better World with a short position of Bangkok Chain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Better World and Bangkok Chain.
Diversification Opportunities for Better World and Bangkok Chain
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Better and Bangkok is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Better World Green and Bangkok Chain Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Chain Hospital and Better World 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 Better World Green are associated (or correlated) with Bangkok Chain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Chain Hospital has no effect on the direction of Better World i.e., Better World and Bangkok Chain go up and down completely randomly.
Pair Corralation between Better World and Bangkok Chain
Assuming the 90 days trading horizon Better World is expected to generate 1.06 times less return on investment than Bangkok Chain. In addition to that, Better World is 1.91 times more volatile than Bangkok Chain Hospital. It trades about 0.02 of its total potential returns per unit of risk. Bangkok Chain Hospital is currently generating about 0.04 per unit of volatility. If you would invest 1,570 in Bangkok Chain Hospital on August 29, 2024 and sell it today you would earn a total of 50.00 from holding Bangkok Chain Hospital or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Better World Green vs. Bangkok Chain Hospital
Performance |
| Timeline |
| Better World Green |
| Bangkok Chain Hospital |
Better World and Bangkok Chain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Better World and Bangkok Chain
The main advantage of trading using opposite Better World and Bangkok Chain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Better World position performs unexpectedly, Bangkok Chain 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 Bangkok Chain will offset losses from the drop in Bangkok Chain's long position.| Better World vs. Beauty Community Public | Better World vs. Demco Public | Better World vs. Asia Aviation Public | Better World vs. CK Power Public |
| Bangkok Chain vs. Bangkok Dusit Medical | Bangkok Chain vs. Chularat Hospital Public | Bangkok Chain vs. Bumrungrad Hospital Public | Bangkok Chain 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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