Correlation Between Bangkok Dusit and Kang Yong
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit and Kang Yong 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 Kang Yong 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 Kang Yong Electric, you can compare the effects of market volatilities on Bangkok Dusit and Kang Yong 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 Kang Yong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Kang Yong.
Diversification Opportunities for Bangkok Dusit and Kang Yong
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bangkok and Kang is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Kang Yong Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kang Yong Electric 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 Kang Yong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kang Yong Electric has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Kang Yong go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Kang Yong
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to under-perform the Kang Yong. In addition to that, Bangkok Dusit is 3.17 times more volatile than Kang Yong Electric. It trades about -0.15 of its total potential returns per unit of risk. Kang Yong Electric is currently generating about -0.03 per unit of volatility. If you would invest 28,900 in Kang Yong Electric on September 27, 2024 and sell it today you would lose (100.00) from holding Kang Yong Electric or give up 0.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.24% |
Values | Daily Returns |
Bangkok Dusit Medical vs. Kang Yong Electric
Performance |
Timeline |
Bangkok Dusit Medical |
Kang Yong Electric |
Bangkok Dusit and Kang Yong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bangkok Dusit and Kang Yong
The main advantage of trading using opposite Bangkok Dusit and Kang Yong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit position performs unexpectedly, Kang Yong 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 Kang Yong will offset losses from the drop in Kang Yong's long position.Bangkok Dusit vs. Bumrungrad Hospital Public | Bangkok Dusit vs. Bangkok Chain Hospital | Bangkok Dusit vs. Ramkhamhaeng Hospital Public | Bangkok Dusit vs. Vibhavadi Medical Center |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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