Correlation Between GM and Bangkok Life
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Bangkok Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Bangkok Life Assurance, you can compare the effects of market volatilities on GM 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 GM with a short position of Bangkok Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Bangkok Life.
Diversification Opportunities for GM and Bangkok Life
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between GM and Bangkok is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding General Motors 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 GM 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 General Motors 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 GM i.e., GM and Bangkok Life go up and down completely randomly.
Pair Corralation between GM and Bangkok Life
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.98 times more return on investment than Bangkok Life. However, General Motors is 1.02 times less risky than Bangkok Life. It trades about 0.05 of its potential returns per unit of risk. Bangkok Life Assurance is currently generating about -0.02 per unit of risk. If you would invest 3,749 in General Motors on August 29, 2024 and sell it today you would earn a total of 1,801 from holding General Motors or generate 48.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.18% |
| Values | Daily Returns |
General Motors vs. Bangkok Life Assurance
Performance |
| Timeline |
| General Motors |
| Bangkok Life Assurance |
GM and Bangkok Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Bangkok Life
The main advantage of trading using opposite GM and Bangkok Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.The idea behind General Motors and Bangkok Life Assurance 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 Life vs. Karmarts Public | Bangkok Life vs. Kang Yong Electric | Bangkok Life vs. Kiatnakin Phatra Bank | Bangkok Life vs. SCG PACKAGING PCL NVDR |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |