Correlation Between Bangkok Bank and Bank

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

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

Diversification Opportunities for Bangkok Bank and Bank

-0.42

Correlation Coefficient

Bangkok Bank  Bank

Very good diversification

The 3 months correlation between Bangkok and Bank is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Bank PCL and Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank and Bangkok Bank 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 Bank PCL are associated (or correlated) with Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank has no effect on the direction of Bangkok Bank i.e., Bangkok Bank and Bank go up and down completely randomly.

Pair Corralation between Bangkok Bank and Bank

If you would invest  2,030  in Bangkok Bank PCL on September 2, 2024 and sell it today you would earn a total of  280.00  from holding Bangkok Bank PCL or generate 13.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Bangkok Bank PCL  vs.  Bank

Bangkok Bank PCL

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bangkok Bank PCL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Bangkok Bank showed solid returns over the last few months and may actually be approaching a breakup point.

Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Bank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bangkok Bank and Bank

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

The idea behind Bangkok Bank PCL and Bank 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.