Correlation Between Lanna Resources and Bangchak Public
Can any of the company-specific risk be diversified away by investing in both Lanna Resources and Bangchak Public 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 Lanna Resources and Bangchak Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lanna Resources Public and Bangchak Public, you can compare the effects of market volatilities on Lanna Resources and Bangchak Public 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 Lanna Resources with a short position of Bangchak Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanna Resources and Bangchak Public.
Diversification Opportunities for Lanna Resources and Bangchak Public
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lanna and Bangchak is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Lanna Resources Public and Bangchak Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangchak Public and Lanna Resources 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 Lanna Resources Public are associated (or correlated) with Bangchak Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangchak Public has no effect on the direction of Lanna Resources i.e., Lanna Resources and Bangchak Public go up and down completely randomly.
Pair Corralation between Lanna Resources and Bangchak Public
Assuming the 90 days trading horizon Lanna Resources Public is expected to generate 0.2 times more return on investment than Bangchak Public. However, Lanna Resources Public is 4.94 times less risky than Bangchak Public. It trades about -0.04 of its potential returns per unit of risk. Bangchak Public is currently generating about -0.13 per unit of risk. If you would invest 1,610 in Lanna Resources Public on September 2, 2024 and sell it today you would lose (10.00) from holding Lanna Resources Public or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lanna Resources Public vs. Bangchak Public
Performance |
| Timeline |
| Lanna Resources Public |
| Bangchak Public |
Lanna Resources and Bangchak Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanna Resources and Bangchak Public
The main advantage of trading using opposite Lanna Resources and Bangchak Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanna Resources position performs unexpectedly, Bangchak Public 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 Bangchak Public will offset losses from the drop in Bangchak Public's long position.| Lanna Resources vs. Sawang Export Public | Lanna Resources vs. Quality Houses Hotel | Lanna Resources vs. Grande Hospitality Real | Lanna Resources vs. City Steel Public |
| Bangchak Public vs. Sawang Export Public | Bangchak Public vs. Quality Houses Hotel | Bangchak Public vs. Grande Hospitality Real | Bangchak Public vs. City Steel Public |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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