Correlation Between G Capital and Bangkok Sheet

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

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

Diversification Opportunities for G Capital and Bangkok Sheet

-0.68

Correlation Coefficient

G Capital  Bangkok Sheet

Excellent diversification

The 3 months correlation between GCAP and Bangkok is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding G Capital Public and Bangkok Sheet Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Sheet Metal and G Capital 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 G Capital Public are associated (or correlated) with Bangkok Sheet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Sheet Metal has no effect on the direction of G Capital i.e., G Capital and Bangkok Sheet go up and down completely randomly.

Pair Corralation between G Capital and Bangkok Sheet

Assuming the 90 days trading horizon G Capital is expected to generate 1.05 times less return on investment than Bangkok Sheet. In addition to that, G Capital is 1.0 times more volatile than Bangkok Sheet Metal. It trades about 0.06 of its total potential returns per unit of risk. Bangkok Sheet Metal is currently generating about 0.06 per unit of volatility. If you would invest  291.00  in Bangkok Sheet Metal on September 13, 2024 and sell it today you would earn a total of  15.00  from holding Bangkok Sheet Metal or generate 5.15% return on investment over 90 days.

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

G Capital Public  vs.  Bangkok Sheet Metal

G Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Capital 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 Sheet Metal

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bangkok Sheet Metal are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Bangkok Sheet is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with G Capital and Bangkok Sheet

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

The idea behind G Capital Public and Bangkok Sheet 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.