Correlation Between Somboon Advance and BPS TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Somboon Advance and BPS TECHNOLOGY 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 Somboon Advance and BPS TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Somboon Advance Technology and BPS TECHNOLOGY PUBLIC, you can compare the effects of market volatilities on Somboon Advance and BPS TECHNOLOGY 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 Somboon Advance with a short position of BPS TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Somboon Advance and BPS TECHNOLOGY.
Diversification Opportunities for Somboon Advance and BPS TECHNOLOGY
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Somboon and BPS is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Somboon Advance Technology and BPS TECHNOLOGY PUBLIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BPS TECHNOLOGY PUBLIC and Somboon Advance 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 Somboon Advance Technology are associated (or correlated) with BPS TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BPS TECHNOLOGY PUBLIC has no effect on the direction of Somboon Advance i.e., Somboon Advance and BPS TECHNOLOGY go up and down completely randomly.
Pair Corralation between Somboon Advance and BPS TECHNOLOGY
Assuming the 90 days trading horizon Somboon Advance Technology is expected to under-perform the BPS TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Somboon Advance Technology is 2.48 times less risky than BPS TECHNOLOGY. The stock trades about -0.14 of its potential returns per unit of risk. The BPS TECHNOLOGY PUBLIC is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 53.00 in BPS TECHNOLOGY PUBLIC on October 7, 2024 and sell it today you would lose (2.00) from holding BPS TECHNOLOGY PUBLIC or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Somboon Advance Technology vs. BPS TECHNOLOGY PUBLIC
Performance |
| Timeline |
| Somboon Advance Tech |
| BPS TECHNOLOGY PUBLIC |
Somboon Advance and BPS TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Somboon Advance and BPS TECHNOLOGY
The main advantage of trading using opposite Somboon Advance and BPS TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Somboon Advance position performs unexpectedly, BPS TECHNOLOGY 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 BPS TECHNOLOGY will offset losses from the drop in BPS TECHNOLOGY's long position.| Somboon Advance vs. AAPICO Hitech Public | Somboon Advance vs. Thai Stanley Electric | Somboon Advance vs. Hana Microelectronics Public | Somboon Advance vs. TISCO Financial Group |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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