Correlation Between Oracle and Bangkok Life

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

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

Diversification Opportunities for Oracle and Bangkok Life

0.08

Correlation Coefficient

Oracle  Bangkok Life

Significant diversification

The 3 months correlation between Oracle and Bangkok is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Bangkok Life Assurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Life Assurance and Oracle 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 Oracle are associated (or correlated) with Bangkok Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Life Assurance has no effect on the direction of Oracle i.e., Oracle and Bangkok Life go up and down completely randomly.

Pair Corralation between Oracle and Bangkok Life

Given the investment horizon of 90 days Oracle is expected to under-perform the Bangkok Life. In addition to that, Oracle is 1.53 times more volatile than Bangkok Life Assurance. It trades about -0.07 of its total potential returns per unit of risk. Bangkok Life Assurance is currently generating about -0.07 per unit of volatility. If you would invest  2,110  in Bangkok Life Assurance on December 29, 2024 and sell it today you would lose (220.00) from holding Bangkok Life Assurance or give up 10.43% of portfolio value over 90 days.

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

Oracle  vs.  Bangkok Life Assurance

Oracle

Risk-Adjusted Performance

Very Weak

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

Bangkok Life Assurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bangkok Life Assurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Oracle and Bangkok Life

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

The idea behind Oracle and Bangkok Life Assurance 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.