Correlation Between Bangkok Sheet and Food Moments

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

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

Diversification Opportunities for Bangkok Sheet and Food Moments

0.5

Correlation Coefficient

Bangkok Sheet  Food Moments

Very weak diversification

The 3 months correlation between Bangkok and Food is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Sheet Metal and Food Moments PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Moments PCL and Bangkok Sheet 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 Sheet Metal are associated (or correlated) with Food Moments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Moments PCL has no effect on the direction of Bangkok Sheet i.e., Bangkok Sheet and Food Moments go up and down completely randomly.

Pair Corralation between Bangkok Sheet and Food Moments

Assuming the 90 days horizon Bangkok Sheet Metal is expected to under-perform the Food Moments. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Sheet Metal is 1.37 times less risky than Food Moments. The stock trades about -0.01 of its potential returns per unit of risk. The Food Moments PCL is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  343.00  in Food Moments PCL on December 19, 2024 and sell it today you would earn a total of  27.00  from holding Food Moments PCL or generate 7.87% return on investment over 90 days.

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

Bangkok Sheet Metal  vs.  Food Moments PCL

Bangkok Sheet Metal

Risk-Adjusted Performance

Very Weak

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

Food Moments PCL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Food Moments PCL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Food Moments may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bangkok Sheet and Food Moments

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

The idea behind Bangkok Sheet Metal and Food Moments PCL 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.