Correlation Between Seafresh Industry and Bangkok Ranch
Can any of the company-specific risk be diversified away by investing in both Seafresh Industry and Bangkok Ranch 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 Seafresh Industry and Bangkok Ranch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seafresh Industry Public and Bangkok Ranch PCL, you can compare the effects of market volatilities on Seafresh Industry and Bangkok Ranch 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 Seafresh Industry with a short position of Bangkok Ranch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seafresh Industry and Bangkok Ranch.
Diversification Opportunities for Seafresh Industry and Bangkok Ranch
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seafresh and Bangkok is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Seafresh Industry Public and Bangkok Ranch PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Ranch PCL and Seafresh Industry 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 Seafresh Industry Public are associated (or correlated) with Bangkok Ranch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Ranch PCL has no effect on the direction of Seafresh Industry i.e., Seafresh Industry and Bangkok Ranch go up and down completely randomly.
Pair Corralation between Seafresh Industry and Bangkok Ranch
Assuming the 90 days trading horizon Seafresh Industry Public is expected to under-perform the Bangkok Ranch. In addition to that, Seafresh Industry is 2.1 times more volatile than Bangkok Ranch PCL. It trades about -0.04 of its total potential returns per unit of risk. Bangkok Ranch PCL is currently generating about -0.07 per unit of volatility. If you would invest 296.00 in Bangkok Ranch PCL on August 28, 2024 and sell it today you would lose (109.00) from holding Bangkok Ranch PCL or give up 36.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seafresh Industry Public vs. Bangkok Ranch PCL
Performance |
| Timeline |
| Seafresh Industry Public |
| Bangkok Ranch PCL |
Seafresh Industry and Bangkok Ranch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seafresh Industry and Bangkok Ranch
The main advantage of trading using opposite Seafresh Industry and Bangkok Ranch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seafresh Industry position performs unexpectedly, Bangkok Ranch 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 Ranch will offset losses from the drop in Bangkok Ranch's long position.The idea behind Seafresh Industry Public and Bangkok Ranch PCL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bangkok Ranch vs. GFPT Public | Bangkok Ranch vs. Asian Sea | Bangkok Ranch vs. Buriram Sugar Public | Bangkok Ranch vs. Ichitan Group Public |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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