Correlation Between Bangsaphan Barmill and Power Line

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

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

Diversification Opportunities for Bangsaphan Barmill and Power Line

0.61

Correlation Coefficient

Bangsaphan Barmill  Power Line

Poor diversification

The 3 months correlation between Bangsaphan and Power is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bangsaphan Barmill Public and Power Line Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Line Engineering and Bangsaphan Barmill 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 Bangsaphan Barmill Public are associated (or correlated) with Power Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Line Engineering has no effect on the direction of Bangsaphan Barmill i.e., Bangsaphan Barmill and Power Line go up and down completely randomly.

Pair Corralation between Bangsaphan Barmill and Power Line

Assuming the 90 days trading horizon Bangsaphan Barmill Public is expected to generate 0.57 times more return on investment than Power Line. However, Bangsaphan Barmill Public is 1.75 times less risky than Power Line. It trades about 0.05 of its potential returns per unit of risk. Power Line Engineering is currently generating about -0.1 per unit of risk. If you would invest  70.00  in Bangsaphan Barmill Public on October 11, 2024 and sell it today you would earn a total of  1.00  from holding Bangsaphan Barmill Public or generate 1.43% return on investment over 90 days.

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

Bangsaphan Barmill Public  vs.  Power Line Engineering

Bangsaphan Barmill Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Power Line Engineering

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Power Line Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bangsaphan Barmill and Power Line

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

The idea behind Bangsaphan Barmill Public and Power Line Engineering 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.