Correlation Between Haad Thip and Khon Kaen
Can any of the company-specific risk be diversified away by investing in both Haad Thip and Khon Kaen 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 Haad Thip and Khon Kaen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haad Thip Public and Khon Kaen Sugar, you can compare the effects of market volatilities on Haad Thip and Khon Kaen 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 Haad Thip with a short position of Khon Kaen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haad Thip and Khon Kaen.
Diversification Opportunities for Haad Thip and Khon Kaen
Good diversification
The 3 months correlation between Haad and Khon is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Haad Thip Public and Khon Kaen Sugar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khon Kaen Sugar and Haad Thip 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 Haad Thip Public are associated (or correlated) with Khon Kaen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khon Kaen Sugar has no effect on the direction of Haad Thip i.e., Haad Thip and Khon Kaen go up and down completely randomly.
Pair Corralation between Haad Thip and Khon Kaen
Assuming the 90 days trading horizon Haad Thip is expected to generate 84.98 times less return on investment than Khon Kaen. But when comparing it to its historical volatility, Haad Thip Public is 48.2 times less risky than Khon Kaen. It trades about 0.03 of its potential returns per unit of risk. Khon Kaen Sugar is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 247.00 in Khon Kaen Sugar on September 12, 2024 and sell it today you would lose (48.00) from holding Khon Kaen Sugar or give up 19.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haad Thip Public vs. Khon Kaen Sugar
Performance |
| Timeline |
| Haad Thip Public |
| Khon Kaen Sugar |
Haad Thip and Khon Kaen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haad Thip and Khon Kaen
The main advantage of trading using opposite Haad Thip and Khon Kaen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haad Thip position performs unexpectedly, Khon Kaen 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 Khon Kaen will offset losses from the drop in Khon Kaen's long position.| Haad Thip vs. Charoen Pokphand Foods | Haad Thip vs. Carabao Group Public | Haad Thip vs. Home Product Center | Haad Thip vs. Ichitan Group Public |
| Khon Kaen vs. GFPT Public | Khon Kaen vs. Dynasty Ceramic Public | Khon Kaen vs. Haad Thip Public | Khon Kaen vs. The Erawan Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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