Correlation Between PT Bank and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both PT Bank and Bangkok Bank 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 PT Bank and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Central and Bangkok Bank Public, you can compare the effects of market volatilities on PT Bank and Bangkok Bank 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 PT Bank with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Bangkok Bank.
Diversification Opportunities for PT Bank and Bangkok Bank
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BZG2 and Bangkok is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Bangkok Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Bank Public and PT Bank 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 PT Bank Central are associated (or correlated) with Bangkok Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Bank Public has no effect on the direction of PT Bank i.e., PT Bank and Bangkok Bank go up and down completely randomly.
Pair Corralation between PT Bank and Bangkok Bank
Assuming the 90 days trading horizon PT Bank is expected to generate 5.4 times less return on investment than Bangkok Bank. But when comparing it to its historical volatility, PT Bank Central is 1.95 times less risky than Bangkok Bank. It trades about 0.02 of its potential returns per unit of risk. Bangkok Bank Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Bangkok Bank Public on September 3, 2024 and sell it today you would earn a total of 305.00 from holding Bangkok Bank Public or generate 321.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Central vs. Bangkok Bank Public
Performance |
| Timeline |
| PT Bank Central |
| Bangkok Bank Public |
PT Bank and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Bangkok Bank
The main advantage of trading using opposite PT Bank and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Bangkok Bank 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 Bank will offset losses from the drop in Bangkok Bank's long position.| PT Bank vs. Vulcan Materials | PT Bank vs. RYU Apparel | PT Bank vs. THORNEY TECHS LTD | PT Bank vs. Hyster Yale Materials Handling |
| Bangkok Bank vs. China Merchants Bank | Bangkok Bank vs. PT Bank Central | Bangkok Bank vs. DBS Group Holdings | Bangkok Bank vs. State Bank of |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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