Correlation Between Dow Jones and Bangkok Life
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Bangkok Life 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 Life 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 Life Assurance, you can compare the effects of market volatilities on Dow Jones and Bangkok Life 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 Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Bangkok Life.
Diversification Opportunities for Dow Jones and Bangkok Life
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Bangkok is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Bangkok Life Assurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Life Assurance 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 Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Life Assurance has no effect on the direction of Dow Jones i.e., Dow Jones and Bangkok Life go up and down completely randomly.
Pair Corralation between Dow Jones and Bangkok Life
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.63 times less return on investment than Bangkok Life. But when comparing it to its historical volatility, Dow Jones Industrial is 3.41 times less risky than Bangkok Life. It trades about 0.11 of its potential returns per unit of risk. Bangkok Life Assurance is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,701 in Bangkok Life Assurance on September 1, 2024 and sell it today you would earn a total of 359.00 from holding Bangkok Life Assurance or generate 21.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.81% |
| Values | Daily Returns |
Dow Jones Industrial vs. Bangkok Life Assurance
Performance |
| Timeline |
Dow Jones and Bangkok Life Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Bangkok Life Assurance
Pair trading matchups for Bangkok Life
Pair Trading with Dow Jones and Bangkok Life
The main advantage of trading using opposite Dow Jones and Bangkok Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Bangkok Life 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 Life will offset losses from the drop in Bangkok Life's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Bangkok Life vs. Bangkok Bank Public | Bangkok Life vs. Indorama Ventures PCL | Bangkok Life vs. Bumrungrad Hospital Public | Bangkok Life vs. Bangkok Dusit Medical |
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 CEOs Directory module to screen CEOs from public companies around the world.
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