Correlation Between Media and Banpu PCL

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

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

Diversification Opportunities for Media and Banpu PCL

-0.4

Correlation Coefficient

Media  Banpu PCL

Very good diversification

The 3 months correlation between Media and Banpu is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and Banpu PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banpu PCL and Media 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 Media and Games are associated (or correlated) with Banpu PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banpu PCL has no effect on the direction of Media i.e., Media and Banpu PCL go up and down completely randomly.

Pair Corralation between Media and Banpu PCL

Assuming the 90 days trading horizon Media and Games is expected to generate 0.7 times more return on investment than Banpu PCL. However, Media and Games is 1.42 times less risky than Banpu PCL. It trades about -0.04 of its potential returns per unit of risk. Banpu PCL is currently generating about -0.03 per unit of risk. If you would invest  360.00  in Media and Games on September 27, 2024 and sell it today you would lose (42.00) from holding Media and Games or give up 11.67% of portfolio value over 90 days.

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

Media and Games  vs.  Banpu PCL

Media and Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Media and Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Banpu PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banpu PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Media and Banpu PCL

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

The idea behind Media and Games and Banpu PCL 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.