Correlation Between Impact Growth and Bangkok Commercial

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

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

Diversification Opportunities for Impact Growth and Bangkok Commercial

-0.11

Correlation Coefficient

Impact Growth  Bangkok Commercial

Good diversification

The 3 months correlation between Impact and Bangkok is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Impact Growth REIT and Bangkok Commercial Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Commercial and Impact Growth 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 Impact Growth REIT are associated (or correlated) with Bangkok Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Commercial has no effect on the direction of Impact Growth i.e., Impact Growth and Bangkok Commercial go up and down completely randomly.

Pair Corralation between Impact Growth and Bangkok Commercial

Assuming the 90 days trading horizon Impact Growth REIT is expected to generate 0.1 times more return on investment than Bangkok Commercial. However, Impact Growth REIT is 9.9 times less risky than Bangkok Commercial. It trades about -0.1 of its potential returns per unit of risk. Bangkok Commercial Property is currently generating about -0.12 per unit of risk. If you would invest  1,198  in Impact Growth REIT on September 5, 2024 and sell it today you would lose (98.00) from holding Impact Growth REIT or give up 8.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Impact Growth REIT  vs.  Bangkok Commercial Property

Impact Growth REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact Growth REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Bangkok Commercial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bangkok Commercial Property 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.

Pair Trading with Impact Growth and Bangkok Commercial

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

The idea behind Impact Growth REIT and Bangkok Commercial Property 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.