Correlation Between Bangkok Life and K W

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

By analyzing existing cross correlation between Bangkok Life Assurance and K W Metal, you can compare the effects of market volatilities on Bangkok Life and K W 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 Life with a short position of K W. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Life and K W.

Diversification Opportunities for Bangkok Life and K W

0.26

Correlation Coefficient

Bangkok Life  K W

Modest diversification

The 3 months correlation between Bangkok and KWM is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Life Assurance and K W Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K W Metal and Bangkok Life 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 Life Assurance are associated (or correlated) with K W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K W Metal has no effect on the direction of Bangkok Life i.e., Bangkok Life and K W go up and down completely randomly.

Pair Corralation between Bangkok Life and K W

Assuming the 90 days trading horizon Bangkok Life Assurance is expected to generate 88.22 times more return on investment than K W. However, Bangkok Life is 88.22 times more volatile than K W Metal. It trades about 0.11 of its potential returns per unit of risk. K W Metal is currently generating about -0.03 per unit of risk. If you would invest  2,470  in Bangkok Life Assurance on September 13, 2024 and sell it today you would lose (380.00) from holding Bangkok Life Assurance or give up 15.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Bangkok Life Assurance  vs.  K W Metal

Bangkok Life Assurance

Risk-Adjusted Performance

8 of 100

OK

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

K W Metal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bangkok Life and K W

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

The idea behind Bangkok Life Assurance and K W Metal 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.