Correlation Between BANPU POWER and Trinity Watthana

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

By analyzing existing cross correlation between BANPU POWER and Trinity Watthana Public, you can compare the effects of market volatilities on BANPU POWER and Trinity Watthana 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 BANPU POWER with a short position of Trinity Watthana. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANPU POWER and Trinity Watthana.

Diversification Opportunities for BANPU POWER and Trinity Watthana

-0.76

Correlation Coefficient

BANPU POWER  Trinity Watthana

Pay attention - limited upside

The 3 months correlation between BANPU and Trinity is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BANPU POWER and Trinity Watthana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Watthana Public and BANPU POWER 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 BANPU POWER are associated (or correlated) with Trinity Watthana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Watthana Public has no effect on the direction of BANPU POWER i.e., BANPU POWER and Trinity Watthana go up and down completely randomly.

Pair Corralation between BANPU POWER and Trinity Watthana

Assuming the 90 days trading horizon BANPU POWER is expected to under-perform the Trinity Watthana. But the stock apears to be less risky and, when comparing its historical volatility, BANPU POWER is 1.06 times less risky than Trinity Watthana. The stock trades about -0.15 of its potential returns per unit of risk. The Trinity Watthana Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  400.00  in Trinity Watthana Public on September 25, 2024 and sell it today you would earn a total of  40.00  from holding Trinity Watthana Public or generate 10.0% return on investment over 90 days.

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

BANPU POWER  vs.  Trinity Watthana Public

BANPU POWER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANPU POWER has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Trinity Watthana Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trinity Watthana Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Trinity Watthana sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BANPU POWER and Trinity Watthana

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

The idea behind BANPU POWER and Trinity Watthana 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..