Correlation Between Bangkok Chain and Delta Electronics

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

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

Diversification Opportunities for Bangkok Chain and Delta Electronics

-0.28

Correlation Coefficient

Bangkok Chain  Delta Electronics

Very good diversification

The 3 months correlation between Bangkok and Delta is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Chain Hospital and Delta Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics Public and Bangkok Chain 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 Chain Hospital are associated (or correlated) with Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics Public has no effect on the direction of Bangkok Chain i.e., Bangkok Chain and Delta Electronics go up and down completely randomly.

Pair Corralation between Bangkok Chain and Delta Electronics

Assuming the 90 days trading horizon Bangkok Chain Hospital is expected to generate 0.5 times more return on investment than Delta Electronics. However, Bangkok Chain Hospital is 2.02 times less risky than Delta Electronics. It trades about -0.05 of its potential returns per unit of risk. Delta Electronics Public is currently generating about -0.24 per unit of risk. If you would invest  1,530  in Bangkok Chain Hospital on December 30, 2024 and sell it today you would lose (130.00) from holding Bangkok Chain Hospital or give up 8.5% of portfolio value over 90 days.

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

Bangkok Chain Hospital  vs.  Delta Electronics Public

Bangkok Chain Hospital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bangkok Chain Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Delta Electronics Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Electronics 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 Bangkok Chain and Delta Electronics

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

The idea behind Bangkok Chain Hospital and Delta Electronics 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.