Correlation Between BTS Group and Bangkok Land

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

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

Diversification Opportunities for BTS Group and Bangkok Land

-0.46

Correlation Coefficient

BTS Group  Bangkok Land

Very good diversification

The 3 months correlation between BTS and Bangkok is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding BTS Group Holdings and Bangkok Land Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Land Public and BTS Group 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 BTS Group Holdings are associated (or correlated) with Bangkok Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Land Public has no effect on the direction of BTS Group i.e., BTS Group and Bangkok Land go up and down completely randomly.

Pair Corralation between BTS Group and Bangkok Land

Assuming the 90 days trading horizon BTS Group Holdings is expected to generate 1.32 times more return on investment than Bangkok Land. However, BTS Group is 1.32 times more volatile than Bangkok Land Public. It trades about 0.2 of its potential returns per unit of risk. Bangkok Land Public is currently generating about -0.08 per unit of risk. If you would invest  470.00  in BTS Group Holdings on September 12, 2024 and sell it today you would earn a total of  100.00  from holding BTS Group Holdings or generate 21.28% return on investment over 90 days.

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

BTS Group Holdings  vs.  Bangkok Land Public

BTS Group Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BTS Group Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, BTS Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bangkok Land Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BTS Group and Bangkok Land

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

The idea behind BTS Group Holdings and Bangkok Land 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..