Correlation Between Stock Exchange and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both Stock Exchange and Bangkok Bank 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 Stock Exchange and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stock Exchange Of and Bangkok Bank Public, you can compare the effects of market volatilities on Stock Exchange and Bangkok Bank 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 Stock Exchange with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and Bangkok Bank.
Diversification Opportunities for Stock Exchange and Bangkok Bank
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stock and Bangkok is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and Bangkok Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Bank Public and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with Bangkok Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Bank Public has no effect on the direction of Stock Exchange i.e., Stock Exchange and Bangkok Bank go up and down completely randomly.
Pair Corralation between Stock Exchange and Bangkok Bank
Assuming the 90 days trading horizon Stock Exchange Of is expected to generate 0.73 times more return on investment than Bangkok Bank. However, Stock Exchange Of is 1.37 times less risky than Bangkok Bank. It trades about -0.04 of its potential returns per unit of risk. Bangkok Bank Public is currently generating about -0.06 per unit of risk. If you would invest 145,303 in Stock Exchange Of on August 28, 2024 and sell it today you would lose (972.00) from holding Stock Exchange Of or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stock Exchange Of vs. Bangkok Bank Public
Performance |
| Timeline |
Stock Exchange and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Stock Exchange Of
Pair trading matchups for Stock Exchange
Bangkok Bank Public
Pair trading matchups for Bangkok Bank
Pair Trading with Stock Exchange and Bangkok Bank
The main advantage of trading using opposite Stock Exchange and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stock Exchange position performs unexpectedly, Bangkok Bank 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 Bank will offset losses from the drop in Bangkok Bank's long position.| Stock Exchange vs. Turnkey Communication Services | Stock Exchange vs. Winnergy Medical Public | Stock Exchange vs. Charoen Pokphand Foods | Stock Exchange vs. Information and Communication |
| Bangkok Bank vs. Thai Energy Storage | Bangkok Bank vs. Royal Orchid Hotel | Bangkok Bank vs. Grand Canal Land | Bangkok Bank vs. PRG 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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