Correlation Between Universal Display and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both Universal Display 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 Universal Display and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and Bangkok Bank Public, you can compare the effects of market volatilities on Universal Display 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 Universal Display with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Bangkok Bank.
Diversification Opportunities for Universal Display and Bangkok Bank
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Universal and Bangkok is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display 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 Universal Display 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 Universal Display 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 Universal Display i.e., Universal Display and Bangkok Bank go up and down completely randomly.
Pair Corralation between Universal Display and Bangkok Bank
Assuming the 90 days horizon Universal Display is expected to under-perform the Bangkok Bank. But the stock apears to be less risky and, when comparing its historical volatility, Universal Display is 1.1 times less risky than Bangkok Bank. The stock trades about -0.07 of its potential returns per unit of risk. The Bangkok Bank Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 406.00 in Bangkok Bank Public on October 7, 2024 and sell it today you would earn a total of 4.00 from holding Bangkok Bank Public or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. Bangkok Bank Public
Performance |
| Timeline |
| Universal Display |
| Bangkok Bank Public |
Universal Display and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Bangkok Bank
The main advantage of trading using opposite Universal Display and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display 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.| Universal Display vs. ASML HOLDING NY | Universal Display vs. Applied Materials | Universal Display vs. Superior Plus Corp | Universal Display vs. NMI Holdings |
| Bangkok Bank vs. CHRYSALIS INVESTMENTS LTD | Bangkok Bank vs. AM EAGLE OUTFITTERS | Bangkok Bank vs. PennantPark Investment | Bangkok Bank vs. Virtus Investment Partners |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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