Correlation Between Ford and KRUNGTHAI CARD
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and KRUNGTHAI CARD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and KRUNGTHAI CARD FGN, you can compare the effects of market volatilities on Ford 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 Ford with a short position of KRUNGTHAI CARD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and KRUNGTHAI CARD.
Diversification Opportunities for Ford and KRUNGTHAI CARD
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and KRUNGTHAI is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and KRUNGTHAI CARD go up and down completely randomly.
Pair Corralation between Ford and KRUNGTHAI CARD
Taking into account the 90-day investment horizon Ford is expected to generate 3.71 times less return on investment than KRUNGTHAI CARD. In addition to that, Ford is 1.89 times more volatile than KRUNGTHAI CARD FGN. It trades about 0.04 of its total potential returns per unit of risk. KRUNGTHAI CARD FGN is currently generating about 0.26 per unit of volatility. If you would invest 135.00 in KRUNGTHAI CARD FGN on October 28, 2024 and sell it today you would earn a total of 6.00 from holding KRUNGTHAI CARD FGN or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ford Motor vs. KRUNGTHAI CARD FGN
Performance |
| Timeline |
| Ford Motor |
| KRUNGTHAI CARD FGN |
Ford and KRUNGTHAI CARD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and KRUNGTHAI CARD
The main advantage of trading using opposite Ford and KRUNGTHAI CARD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.The idea behind Ford Motor and KRUNGTHAI CARD FGN 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.| KRUNGTHAI CARD vs. VULCAN MATERIALS | KRUNGTHAI CARD vs. Martin Marietta Materials | KRUNGTHAI CARD vs. AEGEAN AIRLINES | KRUNGTHAI CARD vs. The Yokohama Rubber |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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