Correlation Between CIMB Thai and TISCO Financial
Can any of the company-specific risk be diversified away by investing in both CIMB Thai and TISCO Financial 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 CIMB Thai and TISCO Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIMB Thai Bank and TISCO Financial Group, you can compare the effects of market volatilities on CIMB Thai and TISCO Financial 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 CIMB Thai with a short position of TISCO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMB Thai and TISCO Financial.
Diversification Opportunities for CIMB Thai and TISCO Financial
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between CIMB and TISCO is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CIMB Thai Bank and TISCO Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TISCO Financial Group and CIMB Thai 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 CIMB Thai Bank are associated (or correlated) with TISCO Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TISCO Financial Group has no effect on the direction of CIMB Thai i.e., CIMB Thai and TISCO Financial go up and down completely randomly.
Pair Corralation between CIMB Thai and TISCO Financial
Assuming the 90 days trading horizon CIMB Thai Bank is expected to generate 77.51 times more return on investment than TISCO Financial. However, CIMB Thai is 77.51 times more volatile than TISCO Financial Group. It trades about 0.04 of its potential returns per unit of risk. TISCO Financial Group is currently generating about 0.06 per unit of risk. If you would invest 82.00 in CIMB Thai Bank on September 14, 2024 and sell it today you would lose (35.00) from holding CIMB Thai Bank or give up 42.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIMB Thai Bank vs. TISCO Financial Group
Performance |
| Timeline |
| CIMB Thai Bank |
| TISCO Financial Group |
CIMB Thai and TISCO Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIMB Thai and TISCO Financial
The main advantage of trading using opposite CIMB Thai and TISCO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIMB Thai position performs unexpectedly, TISCO Financial 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 TISCO Financial will offset losses from the drop in TISCO Financial's long position.| CIMB Thai vs. Bank of Ayudhya | CIMB Thai vs. Krung Thai Bank | CIMB Thai vs. Kiatnakin Phatra Bank | CIMB Thai vs. Asia Aviation Public |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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