Correlation Between Bangkok Dusit and Premier Marketing

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

Diversification Opportunities for Bangkok Dusit and Premier Marketing

-0.12

Correlation Coefficient

Bangkok Dusit  Premier Marketing

Good diversification

The 3 months correlation between Bangkok and Premier is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Premier Marketing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Marketing Public 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 Premier Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Marketing Public has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Premier Marketing go up and down completely randomly.

Pair Corralation between Bangkok Dusit and Premier Marketing

Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to under-perform the Premier Marketing. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Dusit Medical is 1.18 times less risky than Premier Marketing. The stock trades about -0.08 of its potential returns per unit of risk. The Premier Marketing Public is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  846.00  in Premier Marketing Public on December 30, 2024 and sell it today you would earn a total of  174.00  from holding Premier Marketing Public or generate 20.57% return on investment over 90 days.

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

Bangkok Dusit Medical  vs.  Premier Marketing Public

Bangkok Dusit Medical

Risk-Adjusted Performance

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 latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Premier Marketing Public

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Premier Marketing Public are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Premier Marketing disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bangkok Dusit and Premier Marketing

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

The idea behind Bangkok Dusit Medical and Premier Marketing 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.