Correlation Between Ally Leasehold and Bangkok Bank

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

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

Diversification Opportunities for Ally Leasehold and Bangkok Bank

0.37

Correlation Coefficient

Ally Leasehold  Bangkok Bank

Weak diversification

The 3 months correlation between Ally and Bangkok is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ally Leasehold Real and Bangkok Bank PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Bank PCL and Ally Leasehold 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 Ally Leasehold Real are associated (or correlated) with Bangkok Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Bank PCL has no effect on the direction of Ally Leasehold i.e., Ally Leasehold and Bangkok Bank go up and down completely randomly.

Pair Corralation between Ally Leasehold and Bangkok Bank

Assuming the 90 days trading horizon Ally Leasehold Real is expected to under-perform the Bangkok Bank. But the stock apears to be less risky and, when comparing its historical volatility, Ally Leasehold Real is 1.08 times less risky than Bangkok Bank. The stock trades about -0.05 of its potential returns per unit of risk. The Bangkok Bank PCL is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  15,050  in Bangkok Bank PCL on December 23, 2024 and sell it today you would earn a total of  50.00  from holding Bangkok Bank PCL or generate 0.33% return on investment over 90 days.

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

Ally Leasehold Real  vs.  Bangkok Bank PCL

Ally Leasehold Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ally Leasehold Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Ally Leasehold is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Bangkok Bank PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bangkok Bank PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Bangkok Bank is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ally Leasehold and Bangkok Bank

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

The idea behind Ally Leasehold Real and Bangkok Bank 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.