Correlation Between Salesforce and Krung Thai
Can any of the company-specific risk be diversified away by investing in both Salesforce and Krung Thai 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 Salesforce and Krung Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Krung Thai Bank, you can compare the effects of market volatilities on Salesforce and Krung Thai 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 Salesforce with a short position of Krung Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Krung Thai.
Diversification Opportunities for Salesforce and Krung Thai
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Krung is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Krung Thai Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krung Thai Bank and Salesforce 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 Salesforce are associated (or correlated) with Krung Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krung Thai Bank has no effect on the direction of Salesforce i.e., Salesforce and Krung Thai go up and down completely randomly.
Pair Corralation between Salesforce and Krung Thai
Considering the 90-day investment horizon Salesforce is expected to under-perform the Krung Thai. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.04 times less risky than Krung Thai. The stock trades about -0.4 of its potential returns per unit of risk. The Krung Thai Bank is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 65.00 in Krung Thai Bank on December 1, 2024 and sell it today you would lose (4.00) from holding Krung Thai Bank or give up 6.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. Krung Thai Bank
Performance |
| Timeline |
| Salesforce |
| Krung Thai Bank |
Salesforce and Krung Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Krung Thai
The main advantage of trading using opposite Salesforce and Krung Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Krung Thai 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 Krung Thai will offset losses from the drop in Krung Thai's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Krung Thai vs. UNITED RENTALS | Krung Thai vs. SQUIRREL MEDIA SA | Krung Thai vs. LOANDEPOT INC A | Krung Thai vs. CNVISION MEDIA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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