Correlation Between Dow Jones and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Bangkok Bank Public, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Bangkok Bank.
Diversification Opportunities for Dow Jones and Bangkok Bank
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and Bangkok is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Bangkok Bank go up and down completely randomly.
Pair Corralation between Dow Jones and Bangkok Bank
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.59 times more return on investment than Bangkok Bank. However, Dow Jones Industrial is 1.69 times less risky than Bangkok Bank. It trades about 0.13 of its potential returns per unit of risk. Bangkok Bank Public is currently generating about 0.02 per unit of risk. If you would invest 3,541,698 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 845,337 from holding Dow Jones Industrial or generate 23.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.4% |
| Values | Daily Returns |
Dow Jones Industrial vs. Bangkok Bank Public
Performance |
| Timeline |
Dow Jones and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Bangkok Bank Public
Pair trading matchups for Bangkok Bank
Pair Trading with Dow Jones and Bangkok Bank
The main advantage of trading using opposite Dow Jones and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| Bangkok Bank vs. SCB X Public | Bangkok Bank vs. Kasikornbank Public | Bangkok Bank vs. PTT Public | Bangkok Bank vs. The Siam Cement |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |