Correlation Between Communication System and Kiatnakin Phatra
Can any of the company-specific risk be diversified away by investing in both Communication System 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 Communication System and Kiatnakin Phatra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Communication System Solution and Kiatnakin Phatra Bank, you can compare the effects of market volatilities on Communication System 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 Communication System with a short position of Kiatnakin Phatra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication System and Kiatnakin Phatra.
Diversification Opportunities for Communication System and Kiatnakin Phatra
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Communication and Kiatnakin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Communication System Solution 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 Communication System 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 Communication System Solution 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 Communication System i.e., Communication System and Kiatnakin Phatra go up and down completely randomly.
Pair Corralation between Communication System and Kiatnakin Phatra
Assuming the 90 days trading horizon Communication System Solution is expected to generate 0.78 times more return on investment than Kiatnakin Phatra. However, Communication System Solution is 1.28 times less risky than Kiatnakin Phatra. It trades about 0.0 of its potential returns per unit of risk. Kiatnakin Phatra Bank is currently generating about -0.22 per unit of risk. If you would invest 96.00 in Communication System Solution on September 12, 2024 and sell it today you would lose (1.00) from holding Communication System Solution or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Communication System Solution vs. Kiatnakin Phatra Bank
Performance |
| Timeline |
| Communication System |
| Kiatnakin Phatra Bank |
Communication System and Kiatnakin Phatra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication System and Kiatnakin Phatra
The main advantage of trading using opposite Communication System and Kiatnakin Phatra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication System 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.| Communication System vs. Tata Steel Public | Communication System vs. TTCL Public | Communication System vs. Thaifoods Group Public | Communication System vs. TMT Steel Public |
| Kiatnakin Phatra vs. Communication System Solution | Kiatnakin Phatra vs. Techno Medical Public | Kiatnakin Phatra vs. Vintcom Technology PCL | Kiatnakin Phatra vs. Simat Technologies 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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