Correlation Between Vichitbhan Palmoil and Bangkok Union

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

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

Diversification Opportunities for Vichitbhan Palmoil and Bangkok Union

-0.37

Correlation Coefficient

Vichitbhan Palmoil  Bangkok Union

Very good diversification

The 3 months correlation between Vichitbhan and Bangkok is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Vichitbhan Palmoil Public and Bangkok Union Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Union Insurance and Vichitbhan Palmoil 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 Vichitbhan Palmoil Public are associated (or correlated) with Bangkok Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Union Insurance has no effect on the direction of Vichitbhan Palmoil i.e., Vichitbhan Palmoil and Bangkok Union go up and down completely randomly.

Pair Corralation between Vichitbhan Palmoil and Bangkok Union

Assuming the 90 days trading horizon Vichitbhan Palmoil Public is expected to under-perform the Bangkok Union. In addition to that, Vichitbhan Palmoil is 4.05 times more volatile than Bangkok Union Insurance. It trades about -0.1 of its total potential returns per unit of risk. Bangkok Union Insurance is currently generating about 0.03 per unit of volatility. If you would invest  1,580  in Bangkok Union Insurance on October 10, 2024 and sell it today you would earn a total of  20.00  from holding Bangkok Union Insurance or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Vichitbhan Palmoil Public  vs.  Bangkok Union Insurance

Vichitbhan Palmoil Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vichitbhan Palmoil Public 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 basic 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.

Bangkok Union Insurance

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bangkok Union Insurance are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Bangkok Union is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Vichitbhan Palmoil and Bangkok Union

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

The idea behind Vichitbhan Palmoil Public and Bangkok Union Insurance 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.