Correlation Between BGT Public and Cho Thavee

Can any of the company-specific risk be diversified away by investing in both BGT Public and Cho Thavee 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 BGT Public and Cho Thavee into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BGT Public and Cho Thavee Public, you can compare the effects of market volatilities on BGT Public and Cho Thavee 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 BGT Public with a short position of Cho Thavee. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGT Public and Cho Thavee.

Diversification Opportunities for BGT Public and Cho Thavee

0.25

Correlation Coefficient

BGT Public  Cho Thavee

Modest diversification

The 3 months correlation between BGT and Cho is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BGT Public and Cho Thavee Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cho Thavee Public and BGT Public 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 BGT Public are associated (or correlated) with Cho Thavee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cho Thavee Public has no effect on the direction of BGT Public i.e., BGT Public and Cho Thavee go up and down completely randomly.

Pair Corralation between BGT Public and Cho Thavee

Assuming the 90 days trading horizon BGT Public is expected to under-perform the Cho Thavee. But the stock apears to be less risky and, when comparing its historical volatility, BGT Public is 3.54 times less risky than Cho Thavee. The stock trades about -0.02 of its potential returns per unit of risk. The Cho Thavee Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Cho Thavee Public on December 26, 2024 and sell it today you would lose (1.00) from holding Cho Thavee Public or give up 25.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

BGT Public  vs.  Cho Thavee Public

BGT Public

Risk-Adjusted Performance

Very Weak

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

Cho Thavee Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cho Thavee Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Cho Thavee disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BGT Public and Cho Thavee

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

The idea behind BGT Public and Cho Thavee 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.