Correlation Between Heng Leasing and Bangkok Commercial

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

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

Diversification Opportunities for Heng Leasing and Bangkok Commercial

-0.61

Correlation Coefficient

Heng Leasing  Bangkok Commercial

Excellent diversification

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

Pair Corralation between Heng Leasing and Bangkok Commercial

Assuming the 90 days trading horizon Heng Leasing Capital is expected to under-perform the Bangkok Commercial. But the stock apears to be less risky and, when comparing its historical volatility, Heng Leasing Capital is 1.2 times less risky than Bangkok Commercial. The stock trades about -0.05 of its potential returns per unit of risk. The Bangkok Commercial Asset is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  615.00  in Bangkok Commercial Asset on April 23, 2025 and sell it today you would earn a total of  140.00  from holding Bangkok Commercial Asset or generate 22.76% return on investment over 90 days.

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

Heng Leasing Capital  vs.  Bangkok Commercial Asset

Heng Leasing Capital

Risk-Adjusted Performance

Very Weak

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

Bangkok Commercial Asset

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bangkok Commercial Asset are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting primary indicators, Bangkok Commercial disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Heng Leasing and Bangkok Commercial

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

The idea behind Heng Leasing Capital and Bangkok Commercial Asset 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.