Correlation Between Bangkok Dusit and United Airlines

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

Diversification Opportunities for Bangkok Dusit and United Airlines

0.0

Correlation Coefficient

Bangkok Dusit  United Airlines

Pay attention - limited upside

The 3 months correlation between Bangkok and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings 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 United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of Bangkok Dusit i.e., Bangkok Dusit and United Airlines go up and down completely randomly.

Pair Corralation between Bangkok Dusit and United Airlines

If you would invest  9,038  in United Airlines Holdings on September 17, 2024 and sell it today you would earn a total of  473.00  from holding United Airlines Holdings or generate 5.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Bangkok Dusit Medical  vs.  United Airlines Holdings

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. In spite of fairly strong basic indicators, Bangkok Dusit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

United Airlines Holdings

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in United Airlines Holdings are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, United Airlines disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bangkok Dusit and United Airlines

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

The idea behind Bangkok Dusit Medical and United Airlines Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.