Correlation Between BII Railway and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both BII Railway 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 BII Railway and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and Bangkok Bank Public, you can compare the effects of market volatilities on BII Railway 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 BII Railway with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and Bangkok Bank.
Diversification Opportunities for BII Railway and Bangkok Bank
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BII and Bangkok is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation 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 BII Railway 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 BII Railway Transportation 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 BII Railway i.e., BII Railway and Bangkok Bank go up and down completely randomly.
Pair Corralation between BII Railway and Bangkok Bank
Assuming the 90 days horizon BII Railway Transportation is expected to under-perform the Bangkok Bank. In addition to that, BII Railway is 1.24 times more volatile than Bangkok Bank Public. It trades about -0.05 of its total potential returns per unit of risk. Bangkok Bank Public is currently generating about 0.22 per unit of volatility. If you would invest 410.00 in Bangkok Bank Public on November 4, 2024 and sell it today you would earn a total of 24.00 from holding Bangkok Bank Public or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BII Railway Transportation vs. Bangkok Bank Public
Performance |
| Timeline |
| BII Railway Transpor |
| Bangkok Bank Public |
BII Railway and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and Bangkok Bank
The main advantage of trading using opposite BII Railway and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway 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.| BII Railway vs. UNIVERSAL DISPLAY | BII Railway vs. Suntory Beverage Food | BII Railway vs. UNITED UTILITIES GR | BII Railway vs. PLAYTIKA HOLDING DL 01 |
| Bangkok Bank vs. INDO RAMA SYNTHETIC | Bangkok Bank vs. Silicon Motion Technology | Bangkok Bank vs. ON SEMICONDUCTOR | Bangkok Bank vs. MagnaChip Semiconductor Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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