Correlation Between Golden Ventures and Bangkok Sheet

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

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

Diversification Opportunities for Golden Ventures and Bangkok Sheet

0.2

Correlation Coefficient

Golden Ventures  Bangkok Sheet

Modest diversification

The 3 months correlation between Golden and Bangkok is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ventures Leasehold 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 Golden Ventures 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 Golden Ventures Leasehold 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 Golden Ventures i.e., Golden Ventures and Bangkok Sheet go up and down completely randomly.

Pair Corralation between Golden Ventures and Bangkok Sheet

Assuming the 90 days trading horizon Golden Ventures Leasehold is expected to generate 1.44 times more return on investment than Bangkok Sheet. However, Golden Ventures is 1.44 times more volatile than Bangkok Sheet Metal. It trades about 0.31 of its potential returns per unit of risk. Bangkok Sheet Metal is currently generating about 0.08 per unit of risk. If you would invest  611.00  in Golden Ventures Leasehold on September 15, 2024 and sell it today you would earn a total of  49.00  from holding Golden Ventures Leasehold or generate 8.02% return on investment over 90 days.

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

Golden Ventures Leasehold  vs.  Bangkok Sheet Metal

Golden Ventures Leasehold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Ventures Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Golden Ventures is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Golden Ventures and Bangkok Sheet

The main advantage of trading using opposite Golden Ventures and Bangkok Sheet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ventures 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 Golden Ventures Leasehold 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.