Correlation Between Bangkok Bank and Pylon Public

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Can any of the company-specific risk be diversified away by investing in both Bangkok Bank and Pylon 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 Bank and Pylon Public 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 Pylon Public, you can compare the effects of market volatilities on Bangkok Bank and Pylon 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 Bank with a short position of Pylon Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Bank and Pylon Public.

Diversification Opportunities for Bangkok Bank and Pylon Public

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bangkok and Pylon is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank Public and Pylon Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pylon Public 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 Pylon Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pylon Public has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and Pylon Public go up and down completely randomly.

Pair Corralation between Bangkok Bank and Pylon Public

Assuming the 90 days trading horizon Bangkok Bank is expected to generate 79.87 times less return on investment than Pylon Public. But when comparing it to its historical volatility, Bangkok Bank Public is 39.6 times less risky than Pylon Public. It trades about 0.02 of its potential returns per unit of risk. Pylon Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  411.00  in Pylon Public on September 24, 2024 and sell it today you would lose (220.00) from holding Pylon Public or give up 53.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bangkok Bank Public  vs.  Pylon Public

 Performance 
       Timeline  
Bangkok Bank Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bangkok Bank Public 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.
Pylon Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pylon 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Bangkok Bank and Pylon Public Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bangkok Bank and Pylon Public

The main advantage of trading using opposite Bangkok Bank and Pylon Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Bank position performs unexpectedly, Pylon 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 Pylon Public will offset losses from the drop in Pylon Public's long position.
The idea behind Bangkok Bank Public and Pylon 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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