Correlation Between Spring Valley and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both Spring Valley 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 Spring Valley and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spring Valley Acquisition and Bangkok Bank Public, you can compare the effects of market volatilities on Spring Valley 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 Spring Valley with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Valley and Bangkok Bank.
Diversification Opportunities for Spring Valley and Bangkok Bank
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Spring and Bangkok is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition 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 Spring Valley 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 Spring Valley Acquisition 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 Spring Valley i.e., Spring Valley and Bangkok Bank go up and down completely randomly.
Pair Corralation between Spring Valley and Bangkok Bank
Given the investment horizon of 90 days Spring Valley is expected to generate 5.31 times less return on investment than Bangkok Bank. But when comparing it to its historical volatility, Spring Valley Acquisition is 22.03 times less risky than Bangkok Bank. It trades about 0.1 of its potential returns per unit of risk. Bangkok Bank Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 406.00 in Bangkok Bank Public on December 6, 2024 and sell it today you would earn a total of 7.00 from holding Bangkok Bank Public or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 29.96% |
| Values | Daily Returns |
Spring Valley Acquisition vs. Bangkok Bank Public
Performance |
| Timeline |
| Spring Valley Acquisition |
| Bangkok Bank Public |
Spring Valley and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spring Valley and Bangkok Bank
The main advantage of trading using opposite Spring Valley and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Valley 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.The idea behind Spring Valley Acquisition and Bangkok Bank Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bangkok Bank vs. Bank of the | Bangkok Bank vs. BOC Hong Kong | Bangkok Bank vs. China Merchants Bank | Bangkok Bank vs. BDO Unibank ADR |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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