Correlation Between Bangkok Sheet and Interlink Communication

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

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

Diversification Opportunities for Bangkok Sheet and Interlink Communication

-0.24

Correlation Coefficient

Bangkok Sheet  Interlink Communication

Very good diversification

The 3 months correlation between Bangkok and Interlink is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Sheet Metal and Interlink Communication Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Communication and Bangkok Sheet 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 Sheet Metal are associated (or correlated) with Interlink Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlink Communication has no effect on the direction of Bangkok Sheet i.e., Bangkok Sheet and Interlink Communication go up and down completely randomly.

Pair Corralation between Bangkok Sheet and Interlink Communication

Assuming the 90 days horizon Bangkok Sheet Metal is expected to generate 0.49 times more return on investment than Interlink Communication. However, Bangkok Sheet Metal is 2.05 times less risky than Interlink Communication. It trades about 0.13 of its potential returns per unit of risk. Interlink Communication Public is currently generating about -0.05 per unit of risk. If you would invest  292.00  in Bangkok Sheet Metal on September 14, 2024 and sell it today you would earn a total of  20.00  from holding Bangkok Sheet Metal or generate 6.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Bangkok Sheet Metal  vs.  Interlink Communication Public

Bangkok Sheet Metal

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bangkok Sheet Metal are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Bangkok Sheet may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Interlink Communication

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Interlink Communication Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Interlink Communication is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bangkok Sheet and Interlink Communication

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

The idea behind Bangkok Sheet Metal and Interlink Communication Public 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.