Correlation Between Bangkok Dusit and B GRIMM

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

By analyzing existing cross correlation between Bangkok Dusit Medical and B GRIMM POWER, you can compare the effects of market volatilities on Bangkok Dusit and B GRIMM 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 Dusit with a short position of B GRIMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and B GRIMM.

Diversification Opportunities for Bangkok Dusit and B GRIMM

-0.07

Correlation Coefficient

Bangkok Dusit  B GRIMM

Good diversification

The 3 months correlation between Bangkok and BGRIM-R is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and B GRIMM POWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B GRIMM POWER and Bangkok Dusit 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 Dusit Medical are associated (or correlated) with B GRIMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B GRIMM POWER has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and B GRIMM go up and down completely randomly.

Pair Corralation between Bangkok Dusit and B GRIMM

Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to generate 23.19 times more return on investment than B GRIMM. However, Bangkok Dusit is 23.19 times more volatile than B GRIMM POWER. It trades about 0.11 of its potential returns per unit of risk. B GRIMM POWER is currently generating about -0.11 per unit of risk. If you would invest  2,800  in Bangkok Dusit Medical on September 5, 2024 and sell it today you would lose (200.00) from holding Bangkok Dusit Medical or give up 7.14% of portfolio value over 90 days.

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

Bangkok Dusit Medical  vs.  B GRIMM POWER

Bangkok Dusit Medical

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bangkok Dusit Medical are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting primary indicators, Bangkok Dusit sustained solid returns over the last few months and may actually be approaching a breakup point.

B GRIMM POWER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days B GRIMM POWER has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bangkok Dusit and B GRIMM

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

The idea behind Bangkok Dusit Medical and B GRIMM POWER 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.