Correlation Between Bangkok Aviation and BCPG Public

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

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

Diversification Opportunities for Bangkok Aviation and BCPG Public

-0.5

Correlation Coefficient

Bangkok Aviation  BCPG Public

Very good diversification

The 3 months correlation between Bangkok and BCPG is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Aviation Fuel and BCPG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCPG Public and Bangkok Aviation 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 Aviation Fuel are associated (or correlated) with BCPG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCPG Public has no effect on the direction of Bangkok Aviation i.e., Bangkok Aviation and BCPG Public go up and down completely randomly.

Pair Corralation between Bangkok Aviation and BCPG Public

Assuming the 90 days trading horizon Bangkok Aviation Fuel is expected to under-perform the BCPG Public. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Aviation Fuel is 1.57 times less risky than BCPG Public. The stock trades about -0.25 of its potential returns per unit of risk. The BCPG Public is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  537.00  in BCPG Public on December 30, 2024 and sell it today you would earn a total of  143.00  from holding BCPG Public or generate 26.63% return on investment over 90 days.

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

Bangkok Aviation Fuel  vs.  BCPG Public

Bangkok Aviation Fuel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bangkok Aviation Fuel 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 forward-looking signals 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.

BCPG Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BCPG Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, BCPG Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bangkok Aviation and BCPG Public

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

The idea behind Bangkok Aviation Fuel and BCPG Public 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.

Check out your portfolio center.

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 Global Correlations module to find global opportunities by holding instruments from different markets.