Correlation Between Kasikornbank Public and Gulf Energy
Can any of the company-specific risk be diversified away by investing in both Kasikornbank Public and Gulf Energy 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 Kasikornbank Public and Gulf Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasikornbank Public and Gulf Energy Development, you can compare the effects of market volatilities on Kasikornbank Public and Gulf Energy 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 Kasikornbank Public with a short position of Gulf Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasikornbank Public and Gulf Energy.
Diversification Opportunities for Kasikornbank Public and Gulf Energy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kasikornbank and Gulf is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and Gulf Energy Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Energy Development and Kasikornbank Public 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 Kasikornbank Public are associated (or correlated) with Gulf Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Energy Development has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Gulf Energy go up and down completely randomly.
Pair Corralation between Kasikornbank Public and Gulf Energy
Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 0.45 times more return on investment than Gulf Energy. However, Kasikornbank Public is 2.24 times less risky than Gulf Energy. It trades about 0.04 of its potential returns per unit of risk. Gulf Energy Development is currently generating about -0.12 per unit of risk. If you would invest 14,850 in Kasikornbank Public on August 30, 2024 and sell it today you would earn a total of 100.00 from holding Kasikornbank Public or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kasikornbank Public vs. Gulf Energy Development
Performance |
| Timeline |
| Kasikornbank Public |
| Gulf Energy Development |
Kasikornbank Public and Gulf Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kasikornbank Public and Gulf Energy
The main advantage of trading using opposite Kasikornbank Public and Gulf Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasikornbank Public position performs unexpectedly, Gulf Energy 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 Gulf Energy will offset losses from the drop in Gulf Energy's long position.| Kasikornbank Public vs. SCB X Public | Kasikornbank Public vs. Bangkok Bank Public | Kasikornbank Public vs. PTT Public | Kasikornbank Public vs. CP ALL Public |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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