Correlation Between Titan Company and Bangkok Expressway
Can any of the company-specific risk be diversified away by investing in both Titan Company and Bangkok Expressway 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 Titan Company and Bangkok Expressway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan Company Limited and Bangkok Expressway and, you can compare the effects of market volatilities on Titan Company and Bangkok Expressway 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 Titan Company with a short position of Bangkok Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Company and Bangkok Expressway.
Diversification Opportunities for Titan Company and Bangkok Expressway
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Titan and Bangkok is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and Bangkok Expressway and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Expressway and and Titan Company 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 Titan Company Limited are associated (or correlated) with Bangkok Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Expressway and has no effect on the direction of Titan Company i.e., Titan Company and Bangkok Expressway go up and down completely randomly.
Pair Corralation between Titan Company and Bangkok Expressway
Assuming the 90 days trading horizon Titan Company Limited is expected to generate 1.06 times more return on investment than Bangkok Expressway. However, Titan Company is 1.06 times more volatile than Bangkok Expressway and. It trades about 0.03 of its potential returns per unit of risk. Bangkok Expressway and is currently generating about -0.03 per unit of risk. If you would invest 306,826 in Titan Company Limited on September 12, 2024 and sell it today you would earn a total of 40,749 from holding Titan Company Limited or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.69% |
| Values | Daily Returns |
Titan Company Limited vs. Bangkok Expressway and
Performance |
| Timeline |
| Titan Limited |
| Bangkok Expressway and |
Titan Company and Bangkok Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Company and Bangkok Expressway
The main advantage of trading using opposite Titan Company and Bangkok Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Company position performs unexpectedly, Bangkok Expressway 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 Expressway will offset losses from the drop in Bangkok Expressway's long position.| Titan Company vs. Ami Organics Limited | Titan Company vs. Kilitch Drugs Limited | Titan Company vs. Fertilizers and Chemicals | Titan Company vs. Beta Drugs |
| Bangkok Expressway vs. CP ALL Public | Bangkok Expressway vs. Airports of Thailand | Bangkok Expressway vs. Central Pattana 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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