Correlation Between Regional Container and Bank of Ayudhya
Can any of the company-specific risk be diversified away by investing in both Regional Container 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 Regional Container 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 Regional Container Lines and Bank of Ayudhya, you can compare the effects of market volatilities on Regional Container 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 Regional Container with a short position of Bank of Ayudhya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Container and Bank of Ayudhya.
Diversification Opportunities for Regional Container and Bank of Ayudhya
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regional and Bank is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Regional Container Lines 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 Regional Container 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 Regional Container Lines 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 Regional Container i.e., Regional Container and Bank of Ayudhya go up and down completely randomly.
Pair Corralation between Regional Container and Bank of Ayudhya
Assuming the 90 days trading horizon Regional Container Lines is expected to generate 4.94 times more return on investment than Bank of Ayudhya. However, Regional Container is 4.94 times more volatile than Bank of Ayudhya. It trades about 0.22 of its potential returns per unit of risk. Bank of Ayudhya is currently generating about 0.03 per unit of risk. If you would invest 2,408 in Regional Container Lines on September 14, 2024 and sell it today you would earn a total of 392.00 from holding Regional Container Lines or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Regional Container Lines vs. Bank of Ayudhya
Performance |
| Timeline |
| Regional Container Lines |
| Bank of Ayudhya |
Regional Container and Bank of Ayudhya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Container and Bank of Ayudhya
The main advantage of trading using opposite Regional Container and Bank of Ayudhya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Container 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.| Regional Container vs. Bank of Ayudhya | Regional Container vs. The Navakij Insurance | Regional Container vs. Thai Life Insurance | Regional Container vs. Jasmine Telecom Systems |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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