Correlation Between Interlink Communication and Kiatnakin Phatra
Can any of the company-specific risk be diversified away by investing in both Interlink Communication 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 Interlink Communication and Kiatnakin Phatra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interlink Communication Public and Kiatnakin Phatra Bank, you can compare the effects of market volatilities on Interlink Communication 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 Interlink Communication with a short position of Kiatnakin Phatra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlink Communication and Kiatnakin Phatra.
Diversification Opportunities for Interlink Communication and Kiatnakin Phatra
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Interlink and Kiatnakin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Interlink Communication Public 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 Interlink Communication 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 Interlink Communication Public 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 Interlink Communication i.e., Interlink Communication and Kiatnakin Phatra go up and down completely randomly.
Pair Corralation between Interlink Communication and Kiatnakin Phatra
Assuming the 90 days trading horizon Interlink Communication Public is expected to under-perform the Kiatnakin Phatra. But the stock apears to be less risky and, when comparing its historical volatility, Interlink Communication Public is 50.98 times less risky than Kiatnakin Phatra. The stock trades about -0.02 of its potential returns per unit of risk. The Kiatnakin Phatra Bank is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,300 in Kiatnakin Phatra Bank on September 3, 2024 and sell it today you would lose (1,250) from holding Kiatnakin Phatra Bank or give up 19.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.75% |
| Values | Daily Returns |
Interlink Communication Public vs. Kiatnakin Phatra Bank
Performance |
| Timeline |
| Interlink Communication |
| Kiatnakin Phatra Bank |
Interlink Communication and Kiatnakin Phatra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interlink Communication and Kiatnakin Phatra
The main advantage of trading using opposite Interlink Communication and Kiatnakin Phatra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interlink Communication 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.| Interlink Communication vs. KCE Electronics Public | Interlink Communication vs. Land and Houses | Interlink Communication vs. The Siam Cement | Interlink Communication vs. Bangkok Bank 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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