Correlation Between Quality Construction and Bangkok Dusit
Can any of the company-specific risk be diversified away by investing in both Quality Construction and Bangkok Dusit 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 Quality Construction and Bangkok Dusit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quality Construction Products and Bangkok Dusit Medical, you can compare the effects of market volatilities on Quality Construction and Bangkok Dusit 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 Quality Construction with a short position of Bangkok Dusit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quality Construction and Bangkok Dusit.
Diversification Opportunities for Quality Construction and Bangkok Dusit
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quality and Bangkok is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Quality Construction Products and Bangkok Dusit Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Dusit Medical and Quality Construction 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 Quality Construction Products are associated (or correlated) with Bangkok Dusit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Dusit Medical has no effect on the direction of Quality Construction i.e., Quality Construction and Bangkok Dusit go up and down completely randomly.
Pair Corralation between Quality Construction and Bangkok Dusit
Assuming the 90 days trading horizon Quality Construction Products is expected to generate 1.86 times more return on investment than Bangkok Dusit. However, Quality Construction is 1.86 times more volatile than Bangkok Dusit Medical. It trades about 0.14 of its potential returns per unit of risk. Bangkok Dusit Medical is currently generating about -0.22 per unit of risk. If you would invest 900.00 in Quality Construction Products on November 27, 2024 and sell it today you would earn a total of 25.00 from holding Quality Construction Products or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quality Construction Products vs. Bangkok Dusit Medical
Performance |
| Timeline |
| Quality Construction |
| Bangkok Dusit Medical |
Quality Construction and Bangkok Dusit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quality Construction and Bangkok Dusit
The main advantage of trading using opposite Quality Construction and Bangkok Dusit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quality Construction position performs unexpectedly, Bangkok Dusit 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 Dusit will offset losses from the drop in Bangkok Dusit's long position.| Quality Construction vs. TPI Polene Public | Quality Construction vs. Regional Container Lines | Quality Construction vs. Southern Concrete Pile | Quality Construction vs. Tipco Asphalt Public |
| Bangkok Dusit vs. MFC Industrial Investment | Bangkok Dusit vs. Planet Communications Asia | Bangkok Dusit vs. Hana Microelectronics Public | Bangkok Dusit vs. Siamgas and Petrochemicals |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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