Correlation Between Rojana Industrial and Bangchak Public

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

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

Diversification Opportunities for Rojana Industrial and Bangchak Public

-0.63

Correlation Coefficient

Rojana Industrial  Bangchak Public

Excellent diversification

The 3 months correlation between Rojana and Bangchak is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Rojana Industrial Park and Bangchak Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangchak Public and Rojana Industrial 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 Rojana Industrial Park are associated (or correlated) with Bangchak Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangchak Public has no effect on the direction of Rojana Industrial i.e., Rojana Industrial and Bangchak Public go up and down completely randomly.

Pair Corralation between Rojana Industrial and Bangchak Public

Assuming the 90 days trading horizon Rojana Industrial is expected to generate 3.98 times less return on investment than Bangchak Public. But when comparing it to its historical volatility, Rojana Industrial Park is 1.0 times less risky than Bangchak Public. It trades about 0.01 of its potential returns per unit of risk. Bangchak Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,975  in Bangchak Public on December 2, 2024 and sell it today you would earn a total of  875.00  from holding Bangchak Public or generate 29.41% return on investment over 90 days.

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

Rojana Industrial Park  vs.  Bangchak Public

Rojana Industrial Park

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rojana Industrial Park 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Bangchak Public

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bangchak Public are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Bangchak Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rojana Industrial and Bangchak Public

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

The idea behind Rojana Industrial Park and Bangchak Public 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.