Correlation Between Internet Thailand and Krung Thai
Can any of the company-specific risk be diversified away by investing in both Internet Thailand 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 Internet Thailand and Krung Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Internet Thailand Public and Krung Thai Bank, you can compare the effects of market volatilities on Internet Thailand 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 Internet Thailand with a short position of Krung Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and Krung Thai.
Diversification Opportunities for Internet Thailand and Krung Thai
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Internet and Krung is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand Public and Krung Thai Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krung Thai Bank and Internet Thailand 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 Internet Thailand Public 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 Bank has no effect on the direction of Internet Thailand i.e., Internet Thailand and Krung Thai go up and down completely randomly.
Pair Corralation between Internet Thailand and Krung Thai
Assuming the 90 days trading horizon Internet Thailand Public is expected to under-perform the Krung Thai. In addition to that, Internet Thailand is 2.65 times more volatile than Krung Thai Bank. It trades about -0.23 of its total potential returns per unit of risk. Krung Thai Bank is currently generating about 0.18 per unit of volatility. If you would invest 2,110 in Krung Thai Bank on October 20, 2024 and sell it today you would earn a total of 100.00 from holding Krung Thai Bank or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Thailand Public vs. Krung Thai Bank
Performance |
| Timeline |
| Internet Thailand Public |
| Krung Thai Bank |
Internet Thailand and Krung Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and Krung Thai
The main advantage of trading using opposite Internet Thailand and Krung Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand 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.| Internet Thailand vs. Jasmine International Public | Internet Thailand vs. Hana Microelectronics Public | Internet Thailand vs. AP Public | Internet Thailand vs. KCE Electronics Public |
| Krung Thai vs. The Siam Commercial | Krung Thai vs. Thai Union Group | Krung Thai vs. Kasikornbank Public | Krung Thai vs. The Siam Cement |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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