Correlation Between Bangkok Commercial and BG Container

Can any of the company-specific risk be diversified away by investing in both Bangkok Commercial and BG Container 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 Bangkok Commercial and BG Container into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bangkok Commercial Asset and BG Container Glass, you can compare the effects of market volatilities on Bangkok Commercial and BG Container 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 Bangkok Commercial with a short position of BG Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Commercial and BG Container.

Diversification Opportunities for Bangkok Commercial and BG Container

-0.64

Correlation Coefficient

Bangkok Commercial  BG Container

Excellent diversification

The 3 months correlation between Bangkok and BGC is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Commercial Asset and BG Container Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Container Glass and Bangkok Commercial 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 Bangkok Commercial Asset are associated (or correlated) with BG Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Container Glass has no effect on the direction of Bangkok Commercial i.e., Bangkok Commercial and BG Container go up and down completely randomly.

Pair Corralation between Bangkok Commercial and BG Container

Assuming the 90 days trading horizon Bangkok Commercial Asset is expected to under-perform the BG Container. In addition to that, Bangkok Commercial is 1.67 times more volatile than BG Container Glass. It trades about -0.22 of its total potential returns per unit of risk. BG Container Glass is currently generating about 0.24 per unit of volatility. If you would invest  640.00  in BG Container Glass on September 13, 2024 and sell it today you would earn a total of  140.00  from holding BG Container Glass or generate 21.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bangkok Commercial Asset  vs.  BG Container Glass

Bangkok Commercial Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bangkok Commercial Asset has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

BG Container Glass

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BG Container Glass are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, BG Container disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bangkok Commercial and BG Container

The main advantage of trading using opposite Bangkok Commercial and BG Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Commercial position performs unexpectedly, BG Container 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 BG Container will offset losses from the drop in BG Container's long position.

The idea behind Bangkok Commercial Asset and BG Container Glass 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.