Correlation Between ALL ENERGY and Bangkok Dusit

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

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

Diversification Opportunities for ALL ENERGY and Bangkok Dusit

0.32

Correlation Coefficient

ALL ENERGY  Bangkok Dusit

Weak diversification

The 3 months correlation between ALL and Bangkok is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ALL ENERGY UTILITIES and Bangkok Dusit Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Dusit Medical and ALL ENERGY 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 ALL ENERGY UTILITIES are associated (or correlated) with Bangkok Dusit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Dusit Medical has no effect on the direction of ALL ENERGY i.e., ALL ENERGY and Bangkok Dusit go up and down completely randomly.

Pair Corralation between ALL ENERGY and Bangkok Dusit

Assuming the 90 days horizon ALL ENERGY UTILITIES is expected to under-perform the Bangkok Dusit. In addition to that, ALL ENERGY is 15.38 times more volatile than Bangkok Dusit Medical. It trades about -0.16 of its total potential returns per unit of risk. Bangkok Dusit Medical is currently generating about -0.1 per unit of volatility. If you would invest  2,399  in Bangkok Dusit Medical on December 21, 2024 and sell it today you would lose (59.00) from holding Bangkok Dusit Medical or give up 2.46% of portfolio value over 90 days.

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

ALL ENERGY UTILITIES  vs.  Bangkok Dusit Medical

ALL ENERGY UTILITIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALL ENERGY UTILITIES 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 fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bangkok Dusit Medical

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ALL ENERGY and Bangkok Dusit

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

The idea behind ALL ENERGY UTILITIES and Bangkok Dusit Medical 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.