Correlation Between Grande Asset and Bangkok Chain
Can any of the company-specific risk be diversified away by investing in both Grande Asset and Bangkok Chain 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 Grande Asset and Bangkok Chain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grande Asset Hotels and Bangkok Chain Hospital, you can compare the effects of market volatilities on Grande Asset and Bangkok Chain 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 Grande Asset with a short position of Bangkok Chain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Asset and Bangkok Chain.
Diversification Opportunities for Grande Asset and Bangkok Chain
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grande and Bangkok is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Grande Asset Hotels and Bangkok Chain Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Chain Hospital and Grande Asset 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 Grande Asset Hotels are associated (or correlated) with Bangkok Chain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Chain Hospital has no effect on the direction of Grande Asset i.e., Grande Asset and Bangkok Chain go up and down completely randomly.
Pair Corralation between Grande Asset and Bangkok Chain
Assuming the 90 days trading horizon Grande Asset Hotels is expected to generate 67.51 times more return on investment than Bangkok Chain. However, Grande Asset is 67.51 times more volatile than Bangkok Chain Hospital. It trades about 0.12 of its potential returns per unit of risk. Bangkok Chain Hospital is currently generating about 0.04 per unit of risk. If you would invest 8.00 in Grande Asset Hotels on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Grande Asset Hotels or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grande Asset Hotels vs. Bangkok Chain Hospital
Performance |
| Timeline |
| Grande Asset Hotels |
| Bangkok Chain Hospital |
Grande Asset and Bangkok Chain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Asset and Bangkok Chain
The main advantage of trading using opposite Grande Asset and Bangkok Chain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Asset position performs unexpectedly, Bangkok Chain 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 Chain will offset losses from the drop in Bangkok Chain's long position.| Grande Asset vs. CP ALL Public | Grande Asset vs. Bangkok Dusit Medical | Grande Asset vs. Central Pattana Public | Grande Asset vs. Advanced Info Service |
| Bangkok Chain vs. Bangkok Dusit Medical | Bangkok Chain vs. Chularat Hospital Public | Bangkok Chain vs. Bumrungrad Hospital Public | Bangkok Chain vs. Advanced Info Service |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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