Correlation Between Alphabet and Krungthai Card
Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and Krungthai Card into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Krungthai Card PCL, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of Krungthai Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Krungthai Card.
Diversification Opportunities for Alphabet and Krungthai Card
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alphabet and Krungthai is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Krungthai Card PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krungthai Card PCL and Alphabet 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 Alphabet Inc Class C 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 PCL has no effect on the direction of Alphabet i.e., Alphabet and Krungthai Card go up and down completely randomly.
Pair Corralation between Alphabet and Krungthai Card
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 1.96 times more return on investment than Krungthai Card. However, Alphabet is 1.96 times more volatile than Krungthai Card PCL. It trades about 0.02 of its potential returns per unit of risk. Krungthai Card PCL is currently generating about -0.11 per unit of risk. If you would invest 16,834 in Alphabet Inc Class C on August 27, 2024 and sell it today you would earn a total of 109.00 from holding Alphabet Inc Class C or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Krungthai Card PCL
Performance |
| Timeline |
| Alphabet Class C |
| Krungthai Card PCL |
Alphabet and Krungthai Card Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Krungthai Card
The main advantage of trading using opposite Alphabet and Krungthai Card positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class C and Krungthai Card PCL 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. Thai Energy Storage | Krungthai Card vs. Royal Orchid Hotel | Krungthai Card vs. Grand Canal Land | Krungthai Card vs. PRG 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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