Correlation Between Bangkok Expressway and Asset World

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

By analyzing existing cross correlation between Bangkok Expressway and and Asset World Corp, you can compare the effects of market volatilities on Bangkok Expressway and Asset World 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 Expressway with a short position of Asset World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Expressway and Asset World.

Diversification Opportunities for Bangkok Expressway and Asset World

0.72

Correlation Coefficient

Bangkok Expressway  Asset World

Poor diversification

The 3 months correlation between Bangkok and Asset is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Expressway and and Asset World Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asset World Corp and Bangkok Expressway 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 Expressway and are associated (or correlated) with Asset World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asset World Corp has no effect on the direction of Bangkok Expressway i.e., Bangkok Expressway and Asset World go up and down completely randomly.

Pair Corralation between Bangkok Expressway and Asset World

Assuming the 90 days trading horizon Bangkok Expressway and is expected to under-perform the Asset World. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Expressway and is 1.58 times less risky than Asset World. The stock trades about -0.07 of its potential returns per unit of risk. The Asset World Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  346.00  in Asset World Corp on September 3, 2024 and sell it today you would earn a total of  10.00  from holding Asset World Corp or generate 2.89% return on investment over 90 days.

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

Bangkok Expressway and  vs.  Asset World Corp

Bangkok Expressway and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bangkok Expressway and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Bangkok Expressway is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Asset World Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asset World Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Asset World is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bangkok Expressway and Asset World

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

The idea behind Bangkok Expressway and and Asset World Corp 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.