Correlation Between Banpu Public and Amata Public

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

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

Diversification Opportunities for Banpu Public and Amata Public

0.92

Correlation Coefficient

Banpu Public  Amata Public

Almost no diversification

The 3 months correlation between Banpu and Amata is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Banpu Public and Amata Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amata Public and Banpu Public 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 Banpu Public are associated (or correlated) with Amata Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amata Public has no effect on the direction of Banpu Public i.e., Banpu Public and Amata Public go up and down completely randomly.

Pair Corralation between Banpu Public and Amata Public

Assuming the 90 days trading horizon Banpu Public is expected to under-perform the Amata Public. But the stock apears to be less risky and, when comparing its historical volatility, Banpu Public is 1.08 times less risky than Amata Public. The stock trades about -0.27 of its potential returns per unit of risk. The Amata Public is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest  2,950  in Amata Public on December 4, 2024 and sell it today you would lose (770.00) from holding Amata Public or give up 26.1% of portfolio value over 90 days.

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

Banpu Public  vs.  Amata Public

Banpu Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banpu 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 somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Amata Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amata 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 somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Banpu Public and Amata Public

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

The idea behind Banpu Public and Amata 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.