Correlation Between Regional Container and Bangkok Ranch
Can any of the company-specific risk be diversified away by investing in both Regional Container and Bangkok Ranch 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 Bangkok Ranch 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 Bangkok Ranch PCL, you can compare the effects of market volatilities on Regional Container and Bangkok Ranch 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 Bangkok Ranch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Container and Bangkok Ranch.
Diversification Opportunities for Regional Container and Bangkok Ranch
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Regional and Bangkok is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Regional Container Lines and Bangkok Ranch PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Ranch PCL 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 Bangkok Ranch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Ranch PCL has no effect on the direction of Regional Container i.e., Regional Container and Bangkok Ranch go up and down completely randomly.
Pair Corralation between Regional Container and Bangkok Ranch
Assuming the 90 days trading horizon Regional Container Lines is expected to generate 2.1 times more return on investment than Bangkok Ranch. However, Regional Container is 2.1 times more volatile than Bangkok Ranch PCL. It trades about 0.02 of its potential returns per unit of risk. Bangkok Ranch PCL is currently generating about -0.07 per unit of risk. If you would invest 2,492 in Regional Container Lines on August 24, 2024 and sell it today you would earn a total of 158.00 from holding Regional Container Lines or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Regional Container Lines vs. Bangkok Ranch PCL
Performance |
| Timeline |
| Regional Container Lines |
| Bangkok Ranch PCL |
Regional Container and Bangkok Ranch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Container and Bangkok Ranch
The main advantage of trading using opposite Regional Container and Bangkok Ranch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Container position performs unexpectedly, Bangkok Ranch 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 Ranch will offset losses from the drop in Bangkok Ranch's long position.| Regional Container vs. Tata Steel Public | Regional Container vs. Thaifoods Group Public | Regional Container vs. TMT Steel Public | Regional Container vs. The Erawan Group |
| Bangkok Ranch vs. GFPT Public | Bangkok Ranch vs. Asian Sea | Bangkok Ranch vs. Buriram Sugar Public | Bangkok Ranch vs. Ichitan Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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