Correlation Between Hwa Fong and Kiatnakin Phatra
Can any of the company-specific risk be diversified away by investing in both Hwa Fong 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 Hwa Fong and Kiatnakin Phatra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwa Fong Rubber and Kiatnakin Phatra Bank, you can compare the effects of market volatilities on Hwa Fong 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 Hwa Fong with a short position of Kiatnakin Phatra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and Kiatnakin Phatra.
Diversification Opportunities for Hwa Fong and Kiatnakin Phatra
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hwa and Kiatnakin is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber 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 Hwa Fong 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 Hwa Fong Rubber 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 Hwa Fong i.e., Hwa Fong and Kiatnakin Phatra go up and down completely randomly.
Pair Corralation between Hwa Fong and Kiatnakin Phatra
Assuming the 90 days trading horizon Hwa Fong Rubber is expected to generate 30.54 times more return on investment than Kiatnakin Phatra. However, Hwa Fong is 30.54 times more volatile than Kiatnakin Phatra Bank. It trades about 0.04 of its potential returns per unit of risk. Kiatnakin Phatra Bank is currently generating about -0.03 per unit of risk. If you would invest 562.00 in Hwa Fong Rubber on September 3, 2024 and sell it today you would lose (138.00) from holding Hwa Fong Rubber or give up 24.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwa Fong Rubber vs. Kiatnakin Phatra Bank
Performance |
| Timeline |
| Hwa Fong Rubber |
| Kiatnakin Phatra Bank |
Hwa Fong and Kiatnakin Phatra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwa Fong and Kiatnakin Phatra
The main advantage of trading using opposite Hwa Fong and Kiatnakin Phatra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong 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.| Hwa Fong vs. Haad Thip Public | Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Inoue Rubber Public | Hwa Fong vs. Hana Microelectronics Public |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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