Correlation Between BTS Group and CK Power
Can any of the company-specific risk be diversified away by investing in both BTS Group and CK Power 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 BTS Group and CK Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTS Group Holdings and CK Power Public, you can compare the effects of market volatilities on BTS Group and CK Power 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 BTS Group with a short position of CK Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTS Group and CK Power.
Diversification Opportunities for BTS Group and CK Power
Pay attention - limited upside
The 3 months correlation between BTS and CKP is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding BTS Group Holdings and CK Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Power Public and BTS Group 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 BTS Group Holdings are associated (or correlated) with CK Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Power Public has no effect on the direction of BTS Group i.e., BTS Group and CK Power go up and down completely randomly.
Pair Corralation between BTS Group and CK Power
Assuming the 90 days trading horizon BTS Group Holdings is expected to generate 1.2 times more return on investment than CK Power. However, BTS Group is 1.2 times more volatile than CK Power Public. It trades about 0.22 of its potential returns per unit of risk. CK Power Public is currently generating about -0.27 per unit of risk. If you would invest 515.00 in BTS Group Holdings on September 24, 2024 and sell it today you would earn a total of 45.00 from holding BTS Group Holdings or generate 8.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
BTS Group Holdings vs. CK Power Public
Performance |
Timeline |
BTS Group Holdings |
CK Power Public |
BTS Group and CK Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BTS Group and CK Power
The main advantage of trading using opposite BTS Group and CK Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTS Group position performs unexpectedly, CK Power 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 CK Power will offset losses from the drop in CK Power's long position.BTS Group vs. Land and Houses | BTS Group vs. CH Karnchang Public | BTS Group vs. Krung Thai Bank | BTS Group vs. Bangkok Bank Public |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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