Correlation Between Home Product and BTS Group
Can any of the company-specific risk be diversified away by investing in both Home Product and BTS Group 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 Home Product and BTS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Product Center and BTS Group Holdings, you can compare the effects of market volatilities on Home Product and BTS Group 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 Home Product with a short position of BTS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Product and BTS Group.
Diversification Opportunities for Home Product and BTS Group
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Home and BTS is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Home Product Center and BTS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTS Group Holdings and Home Product 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 Home Product Center are associated (or correlated) with BTS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTS Group Holdings has no effect on the direction of Home Product i.e., Home Product and BTS Group go up and down completely randomly.
Pair Corralation between Home Product and BTS Group
Assuming the 90 days trading horizon Home Product is expected to generate 2.43 times less return on investment than BTS Group. But when comparing it to its historical volatility, Home Product Center is 1.07 times less risky than BTS Group. It trades about 0.08 of its potential returns per unit of risk. BTS Group Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 466.00 in BTS Group Holdings on August 26, 2024 and sell it today you would earn a total of 32.00 from holding BTS Group Holdings or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Product Center vs. BTS Group Holdings
Performance |
| Timeline |
| Home Product Center |
| BTS Group Holdings |
Home Product and BTS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Product and BTS Group
The main advantage of trading using opposite Home Product and BTS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Product position performs unexpectedly, BTS Group 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 BTS Group will offset losses from the drop in BTS Group's long position.| Home Product vs. SCB X Public | Home Product vs. Kasikornbank Public | Home Product vs. PTT Public | Home Product vs. Kasikornbank Public |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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