Correlation Between NAT ABSOLUTE and Bank of Ayudhya
Can any of the company-specific risk be diversified away by investing in both NAT ABSOLUTE and Bank of Ayudhya 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 NAT ABSOLUTE and Bank of Ayudhya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAT ABSOLUTE TECHNOLOGIES and Bank of Ayudhya, you can compare the effects of market volatilities on NAT ABSOLUTE and Bank of Ayudhya 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 NAT ABSOLUTE with a short position of Bank of Ayudhya. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAT ABSOLUTE and Bank of Ayudhya.
Diversification Opportunities for NAT ABSOLUTE and Bank of Ayudhya
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NAT and Bank is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding NAT ABSOLUTE TECHNOLOGIES and Bank of Ayudhya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ayudhya and NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES are associated (or correlated) with Bank of Ayudhya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ayudhya has no effect on the direction of NAT ABSOLUTE i.e., NAT ABSOLUTE and Bank of Ayudhya go up and down completely randomly.
Pair Corralation between NAT ABSOLUTE and Bank of Ayudhya
Assuming the 90 days trading horizon NAT ABSOLUTE TECHNOLOGIES is expected to under-perform the Bank of Ayudhya. In addition to that, NAT ABSOLUTE is 1.38 times more volatile than Bank of Ayudhya. It trades about -0.46 of its total potential returns per unit of risk. Bank of Ayudhya is currently generating about 0.03 per unit of volatility. If you would invest 2,490 in Bank of Ayudhya on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Bank of Ayudhya or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NAT ABSOLUTE TECHNOLOGIES vs. Bank of Ayudhya
Performance |
| Timeline |
| NAT ABSOLUTE TECHNOLOGIES |
| Bank of Ayudhya |
NAT ABSOLUTE and Bank of Ayudhya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAT ABSOLUTE and Bank of Ayudhya
The main advantage of trading using opposite NAT ABSOLUTE and Bank of Ayudhya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAT ABSOLUTE position performs unexpectedly, Bank of Ayudhya 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 Bank of Ayudhya will offset losses from the drop in Bank of Ayudhya's long position.| NAT ABSOLUTE vs. Halcyon Technology Public | NAT ABSOLUTE vs. Kasikornbank Public | NAT ABSOLUTE vs. Information and Communication | NAT ABSOLUTE vs. Kiatnakin Phatra Bank |
| Bank of Ayudhya vs. Bangkok Bank Public | Bank of Ayudhya vs. Krung Thai Bank | Bank of Ayudhya vs. SCB X Public | Bank of Ayudhya vs. Kasikornbank 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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