Correlation Between Discover Financial and KRUNGTHAI CARD
Can any of the company-specific risk be diversified away by investing in both Discover Financial and KRUNGTHAI CARD 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 Discover Financial and KRUNGTHAI CARD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and KRUNGTHAI CARD FGN, you can compare the effects of market volatilities on Discover Financial and KRUNGTHAI CARD 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 Discover Financial with a short position of KRUNGTHAI CARD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and KRUNGTHAI CARD.
Diversification Opportunities for Discover Financial and KRUNGTHAI CARD
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Discover and KRUNGTHAI is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and KRUNGTHAI CARD FGN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRUNGTHAI CARD FGN and Discover Financial 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 Discover Financial Services are associated (or correlated) with KRUNGTHAI CARD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRUNGTHAI CARD FGN has no effect on the direction of Discover Financial i.e., Discover Financial and KRUNGTHAI CARD go up and down completely randomly.
Pair Corralation between Discover Financial and KRUNGTHAI CARD
Assuming the 90 days horizon Discover Financial Services is expected to generate 1.28 times more return on investment than KRUNGTHAI CARD. However, Discover Financial is 1.28 times more volatile than KRUNGTHAI CARD FGN. It trades about 0.07 of its potential returns per unit of risk. KRUNGTHAI CARD FGN is currently generating about 0.02 per unit of risk. If you would invest 10,049 in Discover Financial Services on October 12, 2024 and sell it today you would earn a total of 7,047 from holding Discover Financial Services or generate 70.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discover Financial Services vs. KRUNGTHAI CARD FGN
Performance |
| Timeline |
| Discover Financial |
| KRUNGTHAI CARD FGN |
Discover Financial and KRUNGTHAI CARD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and KRUNGTHAI CARD
The main advantage of trading using opposite Discover Financial and KRUNGTHAI CARD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, KRUNGTHAI CARD 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 KRUNGTHAI CARD will offset losses from the drop in KRUNGTHAI CARD's long position.| Discover Financial vs. Platinum Investment Management | Discover Financial vs. Sims Metal Management | Discover Financial vs. Brockhaus Capital Management | Discover Financial vs. British American Tobacco |
| KRUNGTHAI CARD vs. Visa Inc | KRUNGTHAI CARD vs. Discover Financial Services | KRUNGTHAI CARD vs. Superior Plus Corp | KRUNGTHAI CARD vs. NMI Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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