Correlation Between HDFC Bank and KRUNG THAI
Can any of the company-specific risk be diversified away by investing in both HDFC Bank 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 HDFC Bank and KRUNG THAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HDFC Bank Limited and KRUNG THAI FGN , you can compare the effects of market volatilities on HDFC Bank 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 HDFC Bank with a short position of KRUNG THAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of HDFC Bank and KRUNG THAI.
Diversification Opportunities for HDFC Bank and KRUNG THAI
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between HDFC and KRUNG is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding HDFC Bank Limited and KRUNG THAI FGN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRUNG THAI FGN and HDFC Bank 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 HDFC Bank Limited 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 FGN has no effect on the direction of HDFC Bank i.e., HDFC Bank and KRUNG THAI go up and down completely randomly.
Pair Corralation between HDFC Bank and KRUNG THAI
Assuming the 90 days trading horizon HDFC Bank Limited is expected to generate 0.96 times more return on investment than KRUNG THAI. However, HDFC Bank Limited is 1.04 times less risky than KRUNG THAI. It trades about 0.18 of its potential returns per unit of risk. KRUNG THAI FGN is currently generating about -0.03 per unit of risk. If you would invest 5,850 in HDFC Bank Limited on September 1, 2024 and sell it today you would earn a total of 450.00 from holding HDFC Bank Limited or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
HDFC Bank Limited vs. KRUNG THAI FGN
Performance |
| Timeline |
| HDFC Bank Limited |
| KRUNG THAI FGN |
HDFC Bank and KRUNG THAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HDFC Bank and KRUNG THAI
The main advantage of trading using opposite HDFC Bank and KRUNG THAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HDFC Bank 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.| HDFC Bank vs. Zijin Mining Group | HDFC Bank vs. TELES Informationstechnologien AG | HDFC Bank vs. Public Storage | HDFC Bank vs. MAGNUM MINING EXP |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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