Correlation Between Bangkok Dusit and Vichitbhan Palmoil

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

Diversification Opportunities for Bangkok Dusit and Vichitbhan Palmoil

0.19

Correlation Coefficient

Bangkok Dusit  Vichitbhan Palmoil

Average diversification

The 3 months correlation between Bangkok and Vichitbhan is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and Vichitbhan Palmoil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vichitbhan Palmoil 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 Vichitbhan Palmoil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vichitbhan Palmoil Public has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and Vichitbhan Palmoil go up and down completely randomly.

Pair Corralation between Bangkok Dusit and Vichitbhan Palmoil

Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to under-perform the Vichitbhan Palmoil. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Dusit Medical is 2.62 times less risky than Vichitbhan Palmoil. The stock trades about -0.09 of its potential returns per unit of risk. The Vichitbhan Palmoil Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  62.00  in Vichitbhan Palmoil Public on September 5, 2024 and sell it today you would earn a total of  5.00  from holding Vichitbhan Palmoil Public or generate 8.06% return on investment over 90 days.

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

Bangkok Dusit Medical  vs.  Vichitbhan Palmoil Public

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 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.

Vichitbhan Palmoil Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vichitbhan Palmoil Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Vichitbhan Palmoil may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bangkok Dusit and Vichitbhan Palmoil

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

The idea behind Bangkok Dusit Medical and Vichitbhan Palmoil 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.