Correlation Between Everland Public and Bangkok Land

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

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

Diversification Opportunities for Everland Public and Bangkok Land

0.66

Correlation Coefficient

Everland Public  Bangkok Land

Poor diversification

The 3 months correlation between Everland and Bangkok is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Everland Public 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 Everland Public 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 Everland Public 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 Everland Public i.e., Everland Public and Bangkok Land go up and down completely randomly.

Pair Corralation between Everland Public and Bangkok Land

Assuming the 90 days trading horizon Everland Public is expected to under-perform the Bangkok Land. In addition to that, Everland Public is 4.47 times more volatile than Bangkok Land Public. It trades about -0.05 of its total potential returns per unit of risk. Bangkok Land Public is currently generating about -0.13 per unit of volatility. If you would invest  67.00  in Bangkok Land Public on September 14, 2024 and sell it today you would lose (6.00) from holding Bangkok Land Public or give up 8.96% of portfolio value over 90 days.

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

Everland Public  vs.  Bangkok Land Public

Everland Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everland Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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 latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Everland Public and Bangkok Land

The main advantage of trading using opposite Everland Public and Bangkok Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everland Public 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 Everland Public 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 Global Correlations module to find global opportunities by holding instruments from different markets.