Correlation Between Microsoft and Bangkok Land
Can any of the company-specific risk be diversified away by investing in both Microsoft and Bangkok Land 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 Microsoft and Bangkok Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Bangkok Land Public, you can compare the effects of market volatilities on Microsoft and Bangkok Land 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 Microsoft with a short position of Bangkok Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Bangkok Land.
Diversification Opportunities for Microsoft and Bangkok Land
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and Bangkok is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Bangkok Land Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Land Public and Microsoft 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 Microsoft are associated (or correlated) with Bangkok Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Land Public has no effect on the direction of Microsoft i.e., Microsoft and Bangkok Land go up and down completely randomly.
Pair Corralation between Microsoft and Bangkok Land
Given the investment horizon of 90 days Microsoft is expected to generate 1.06 times more return on investment than Bangkok Land. However, Microsoft is 1.06 times more volatile than Bangkok Land Public. It trades about -0.01 of its potential returns per unit of risk. Bangkok Land Public is currently generating about -0.12 per unit of risk. If you would invest 41,858 in Microsoft on November 3, 2024 and sell it today you would lose (352.00) from holding Microsoft or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Microsoft vs. Bangkok Land Public
Performance |
| Timeline |
| Microsoft |
| Bangkok Land Public |
Microsoft and Bangkok Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Bangkok Land
The main advantage of trading using opposite Microsoft and Bangkok Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Bangkok Land 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 Land will offset losses from the drop in Bangkok Land's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Bangkok Land vs. Siri Prime Office | Bangkok Land vs. BTS Group Holdings | Bangkok Land vs. Quality Houses Public | Bangkok Land vs. Land and Houses |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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