Correlation Between Kasikornbank Public and Goodyear Public
Can any of the company-specific risk be diversified away by investing in both Kasikornbank Public and Goodyear Public 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 Goodyear Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasikornbank Public and Goodyear Public, you can compare the effects of market volatilities on Kasikornbank Public and Goodyear Public 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 Goodyear Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasikornbank Public and Goodyear Public.
Diversification Opportunities for Kasikornbank Public and Goodyear Public
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kasikornbank and Goodyear is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and Goodyear Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodyear Public 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 Goodyear Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodyear Public has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Goodyear Public go up and down completely randomly.
Pair Corralation between Kasikornbank Public and Goodyear Public
Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 5.69 times less return on investment than Goodyear Public. But when comparing it to its historical volatility, Kasikornbank Public is 2.47 times less risky than Goodyear Public. It trades about 0.1 of its potential returns per unit of risk. Goodyear Public is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 15,400 in Goodyear Public on August 24, 2024 and sell it today you would earn a total of 1,550 from holding Goodyear Public or generate 10.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kasikornbank Public vs. Goodyear Public
Performance |
| Timeline |
| Kasikornbank Public |
| Goodyear Public |
Kasikornbank Public and Goodyear Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kasikornbank Public and Goodyear Public
The main advantage of trading using opposite Kasikornbank Public and Goodyear Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasikornbank Public position performs unexpectedly, Goodyear Public 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 Goodyear Public will offset losses from the drop in Goodyear Public'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 |
| Goodyear Public vs. SCB X Public | Goodyear Public vs. Kasikornbank Public | Goodyear Public vs. PTT Public | Goodyear Public vs. Kasikornbank 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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