Correlation Between Bangkok Dusit and ALL ENERGY

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

By analyzing existing cross correlation between Bangkok Dusit Medical and ALL ENERGY UTILITIES, you can compare the effects of market volatilities on Bangkok Dusit and ALL ENERGY 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 Dusit with a short position of ALL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and ALL ENERGY.

Diversification Opportunities for Bangkok Dusit and ALL ENERGY

0.01

Correlation Coefficient

Bangkok Dusit  ALL ENERGY

Significant diversification

The 3 months correlation between Bangkok and ALL is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and ALL ENERGY UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL ENERGY UTILITIES and Bangkok Dusit 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 Dusit Medical are associated (or correlated) with ALL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL ENERGY UTILITIES has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and ALL ENERGY go up and down completely randomly.

Pair Corralation between Bangkok Dusit and ALL ENERGY

Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to generate 0.08 times more return on investment than ALL ENERGY. However, Bangkok Dusit Medical is 12.81 times less risky than ALL ENERGY. It trades about -0.22 of its potential returns per unit of risk. ALL ENERGY UTILITIES is currently generating about -0.05 per unit of risk. If you would invest  2,399  in Bangkok Dusit Medical on October 26, 2024 and sell it today you would lose (29.00) from holding Bangkok Dusit Medical or give up 1.21% of portfolio value over 90 days.

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

Bangkok Dusit Medical  vs.  ALL ENERGY UTILITIES

Bangkok Dusit Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bangkok Dusit Medical 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 primary indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ALL ENERGY UTILITIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALL ENERGY UTILITIES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bangkok Dusit and ALL ENERGY

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

The idea behind Bangkok Dusit Medical and ALL ENERGY UTILITIES 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.