Correlation Between PMC LABEL and Bank of Ayudhya
Can any of the company-specific risk be diversified away by investing in both PMC LABEL 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 PMC LABEL 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 PMC LABEL MATERIALS and Bank of Ayudhya, you can compare the effects of market volatilities on PMC LABEL 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 PMC LABEL with a short position of Bank of Ayudhya. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMC LABEL and Bank of Ayudhya.
Diversification Opportunities for PMC LABEL and Bank of Ayudhya
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PMC and Bank is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding PMC LABEL MATERIALS 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 PMC LABEL 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 PMC LABEL MATERIALS 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 PMC LABEL i.e., PMC LABEL and Bank of Ayudhya go up and down completely randomly.
Pair Corralation between PMC LABEL and Bank of Ayudhya
Assuming the 90 days trading horizon PMC LABEL MATERIALS is expected to under-perform the Bank of Ayudhya. In addition to that, PMC LABEL is 1.65 times more volatile than Bank of Ayudhya. It trades about -0.31 of its total potential returns per unit of risk. Bank of Ayudhya is currently generating about -0.23 per unit of volatility. If you would invest 2,270 in Bank of Ayudhya on January 9, 2025 and sell it today you would lose (120.00) from holding Bank of Ayudhya or give up 5.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
PMC LABEL MATERIALS vs. Bank of Ayudhya
Performance |
| Timeline |
| PMC LABEL MATERIALS |
| Bank of Ayudhya |
PMC LABEL and Bank of Ayudhya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMC LABEL and Bank of Ayudhya
The main advantage of trading using opposite PMC LABEL and Bank of Ayudhya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMC LABEL 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.| PMC LABEL vs. Earth Tech Environment | PMC LABEL vs. BCPG Public | PMC LABEL vs. CK Power Public | PMC LABEL vs. Com7 PCL |
| Bank of Ayudhya vs. Asia Plus Group | Bank of Ayudhya vs. Globlex Holding Management | Bank of Ayudhya vs. Asia Green Energy | Bank of Ayudhya vs. Amanah Leasing 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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