Correlation Between Bangkok Bank and Platinum

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

By analyzing existing cross correlation between Bangkok Bank Public and The Platinum Group, you can compare the effects of market volatilities on Bangkok Bank and Platinum 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 Bank with a short position of Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and Platinum.

Diversification Opportunities for Bangkok Bank and Platinum

-0.02

Correlation Coefficient

Bangkok Bank  Platinum

Good diversification

The 3 months correlation between Bangkok and Platinum is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and The Platinum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group and Bangkok Bank 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 Bank Public are associated (or correlated) with Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and Platinum go up and down completely randomly.

Pair Corralation between Bangkok Bank and Platinum

Assuming the 90 days trading horizon Bangkok Bank is expected to generate 121.03 times less return on investment than Platinum. But when comparing it to its historical volatility, Bangkok Bank Public is 39.92 times less risky than Platinum. It trades about 0.01 of its potential returns per unit of risk. The Platinum Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  384.00  in The Platinum Group on September 27, 2024 and sell it today you would lose (156.00) from holding The Platinum Group or give up 40.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Bangkok Bank Public  vs.  The Platinum Group

Bangkok Bank Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bangkok Bank Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Bangkok Bank is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Platinum Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Platinum Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Platinum is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bangkok Bank and Platinum

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

The idea behind Bangkok Bank Public and The Platinum Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.