Correlation Between Bangkok Airways and UOB Kay

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

By analyzing existing cross correlation between Bangkok Airways Public and UOB Kay Hian, you can compare the effects of market volatilities on Bangkok Airways and UOB Kay 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 Bangkok Airways with a short position of UOB Kay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Airways and UOB Kay.

Diversification Opportunities for Bangkok Airways and UOB Kay

-0.57

Correlation Coefficient

Bangkok Airways  UOB Kay

Excellent diversification

The 3 months correlation between Bangkok and UOB is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Airways Public and UOB Kay Hian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UOB Kay Hian and Bangkok Airways 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 Bangkok Airways Public are associated (or correlated) with UOB Kay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UOB Kay Hian has no effect on the direction of Bangkok Airways i.e., Bangkok Airways and UOB Kay go up and down completely randomly.

Pair Corralation between Bangkok Airways and UOB Kay

Assuming the 90 days horizon Bangkok Airways Public is expected to under-perform the UOB Kay. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Airways Public is 1.1 times less risky than UOB Kay. The stock trades about -0.18 of its potential returns per unit of risk. The UOB Kay Hian is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  500.00  in UOB Kay Hian on October 26, 2024 and sell it today you would earn a total of  30.00  from holding UOB Kay Hian or generate 6.0% return on investment over 90 days.

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

Bangkok Airways Public  vs.  UOB Kay Hian

Bangkok Airways Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bangkok Airways Public 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

UOB Kay Hian

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UOB Kay Hian are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, UOB Kay may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bangkok Airways and UOB Kay

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

The idea behind Bangkok Airways Public and UOB Kay Hian 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.