Correlation Between GMM Grammy and BEC World
Can any of the company-specific risk be diversified away by investing in both GMM Grammy and BEC World 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 GMM Grammy and BEC World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMM Grammy Public and BEC World Public, you can compare the effects of market volatilities on GMM Grammy and BEC World 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 GMM Grammy with a short position of BEC World. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMM Grammy and BEC World.
Diversification Opportunities for GMM Grammy and BEC World
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GMM and BEC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding GMM Grammy Public and BEC World Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEC World Public and GMM Grammy 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 GMM Grammy Public are associated (or correlated) with BEC World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEC World Public has no effect on the direction of GMM Grammy i.e., GMM Grammy and BEC World go up and down completely randomly.
Pair Corralation between GMM Grammy and BEC World
Assuming the 90 days trading horizon GMM Grammy is expected to generate 81.78 times less return on investment than BEC World. But when comparing it to its historical volatility, GMM Grammy Public is 36.9 times less risky than BEC World. It trades about 0.04 of its potential returns per unit of risk. BEC World Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 441.00 in BEC World Public on September 1, 2024 and sell it today you would lose (43.00) from holding BEC World Public or give up 9.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
GMM Grammy Public vs. BEC World Public
Performance |
| Timeline |
| GMM Grammy Public |
| BEC World Public |
GMM Grammy and BEC World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMM Grammy and BEC World
The main advantage of trading using opposite GMM Grammy and BEC World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMM Grammy position performs unexpectedly, BEC World 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 BEC World will offset losses from the drop in BEC World's long position.| GMM Grammy vs. Healthlead Public | GMM Grammy vs. Ramkhamhaeng Hospital Public | GMM Grammy vs. AddTech Hub Public | GMM Grammy vs. Praram 9 Hospital |
| BEC World vs. Land and Houses | BEC World vs. AP Public | BEC World vs. Bangkok Bank Public | BEC World vs. Charoen Pokphand Foods |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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