Correlation Between AP Public and Kiatnakin Phatra
Can any of the company-specific risk be diversified away by investing in both AP Public and Kiatnakin Phatra 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 AP Public and Kiatnakin Phatra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Public and Kiatnakin Phatra Bank, you can compare the effects of market volatilities on AP Public and Kiatnakin Phatra 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 AP Public with a short position of Kiatnakin Phatra. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Public and Kiatnakin Phatra.
Diversification Opportunities for AP Public and Kiatnakin Phatra
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AP Public and Kiatnakin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AP Public and Kiatnakin Phatra Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiatnakin Phatra Bank and AP Public 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 AP Public are associated (or correlated) with Kiatnakin Phatra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiatnakin Phatra Bank has no effect on the direction of AP Public i.e., AP Public and Kiatnakin Phatra go up and down completely randomly.
Pair Corralation between AP Public and Kiatnakin Phatra
Assuming the 90 days horizon AP Public is expected to under-perform the Kiatnakin Phatra. But the stock apears to be less risky and, when comparing its historical volatility, AP Public is 1.06 times less risky than Kiatnakin Phatra. The stock trades about -0.03 of its potential returns per unit of risk. The Kiatnakin Phatra Bank is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,847 in Kiatnakin Phatra Bank on August 27, 2024 and sell it today you would earn a total of 353.00 from holding Kiatnakin Phatra Bank or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Public vs. Kiatnakin Phatra Bank
Performance |
| Timeline |
| AP Public |
| Kiatnakin Phatra Bank |
AP Public and Kiatnakin Phatra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Public and Kiatnakin Phatra
The main advantage of trading using opposite AP Public and Kiatnakin Phatra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Public position performs unexpectedly, Kiatnakin Phatra 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 Kiatnakin Phatra will offset losses from the drop in Kiatnakin Phatra's long position.The idea behind AP Public and Kiatnakin Phatra Bank 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.| Kiatnakin Phatra vs. TISCO Financial Group | Kiatnakin Phatra vs. Kasikornbank Public | Kiatnakin Phatra vs. Thanachart Capital Public | Kiatnakin Phatra vs. SCB X 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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