Correlation Between Bangkok Bank and AEON Thana

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

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

Diversification Opportunities for Bangkok Bank and AEON Thana

0.69

Correlation Coefficient

Bangkok Bank  AEON Thana

Poor diversification

The 3 months correlation between Bangkok and AEON is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and AEON Thana Sinsap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON Thana Sinsap and Bangkok Bank 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 Bank Public are associated (or correlated) with AEON Thana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON Thana Sinsap has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and AEON Thana go up and down completely randomly.

Pair Corralation between Bangkok Bank and AEON Thana

Assuming the 90 days trading horizon Bangkok Bank Public is expected to generate 0.67 times more return on investment than AEON Thana. However, Bangkok Bank Public is 1.5 times less risky than AEON Thana. It trades about 0.11 of its potential returns per unit of risk. AEON Thana Sinsap is currently generating about 0.01 per unit of risk. If you would invest  13,752  in Bangkok Bank Public on September 1, 2024 and sell it today you would earn a total of  1,198  from holding Bangkok Bank Public or generate 8.71% return on investment over 90 days.

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

Bangkok Bank Public  vs.  AEON Thana Sinsap

Bangkok Bank Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bangkok Bank Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Bangkok Bank may actually be approaching a critical reversion point that can send shares even higher in December 2024.

AEON Thana Sinsap

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AEON Thana Sinsap are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, AEON Thana is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bangkok Bank and AEON Thana

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

The idea behind Bangkok Bank Public and AEON Thana Sinsap 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.