Correlation Between Yong Concrete and Bangkok Chain
Can any of the company-specific risk be diversified away by investing in both Yong Concrete and Bangkok Chain 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 Yong Concrete and Bangkok Chain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yong Concrete PCL and Bangkok Chain Hospital, you can compare the effects of market volatilities on Yong Concrete and Bangkok Chain 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 Yong Concrete with a short position of Bangkok Chain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yong Concrete and Bangkok Chain.
Diversification Opportunities for Yong Concrete and Bangkok Chain
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yong and Bangkok is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Yong Concrete PCL and Bangkok Chain Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Chain Hospital and Yong Concrete 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 Yong Concrete PCL are associated (or correlated) with Bangkok Chain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Chain Hospital has no effect on the direction of Yong Concrete i.e., Yong Concrete and Bangkok Chain go up and down completely randomly.
Pair Corralation between Yong Concrete and Bangkok Chain
Assuming the 90 days trading horizon Yong Concrete PCL is expected to under-perform the Bangkok Chain. In addition to that, Yong Concrete is 1.33 times more volatile than Bangkok Chain Hospital. It trades about -0.22 of its total potential returns per unit of risk. Bangkok Chain Hospital is currently generating about -0.14 per unit of volatility. If you would invest 1,773 in Bangkok Chain Hospital on September 1, 2024 and sell it today you would lose (113.00) from holding Bangkok Chain Hospital or give up 6.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yong Concrete PCL vs. Bangkok Chain Hospital
Performance |
| Timeline |
| Yong Concrete PCL |
| Bangkok Chain Hospital |
Yong Concrete and Bangkok Chain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yong Concrete and Bangkok Chain
The main advantage of trading using opposite Yong Concrete and Bangkok Chain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yong Concrete position performs unexpectedly, Bangkok Chain 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 Chain will offset losses from the drop in Bangkok Chain's long position.| Yong Concrete vs. Exotic Food Public | Yong Concrete vs. Knight Club Capital | Yong Concrete vs. North East Rubbers | Yong Concrete vs. Yggdrazil Group Public |
| Bangkok Chain vs. Bangkok Dusit Medical | Bangkok Chain vs. Bumrungrad Hospital Public | Bangkok Chain vs. Bangkok Chain Hospital | Bangkok Chain vs. Rajthanee Hospital 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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