Correlation Between Kasikornbank Public and TCM Public
Can any of the company-specific risk be diversified away by investing in both Kasikornbank Public and TCM 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 TCM 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 TCM Public, you can compare the effects of market volatilities on Kasikornbank Public and TCM 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 TCM Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasikornbank Public and TCM Public.
Diversification Opportunities for Kasikornbank Public and TCM Public
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kasikornbank and TCM is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and TCM Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCM 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 TCM Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCM Public has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and TCM Public go up and down completely randomly.
Pair Corralation between Kasikornbank Public and TCM Public
Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 38.62 times less return on investment than TCM Public. But when comparing it to its historical volatility, Kasikornbank Public is 45.64 times less risky than TCM Public. It trades about 0.05 of its potential returns per unit of risk. TCM Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 194.00 in TCM Public on August 31, 2024 and sell it today you would lose (123.00) from holding TCM Public or give up 63.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kasikornbank Public vs. TCM Public
Performance |
| Timeline |
| Kasikornbank Public |
| TCM Public |
Kasikornbank Public and TCM Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kasikornbank Public and TCM Public
The main advantage of trading using opposite Kasikornbank Public and TCM Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasikornbank Public position performs unexpectedly, TCM 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 TCM Public will offset losses from the drop in TCM Public's long position.| Kasikornbank Public vs. TISCO Financial Group | Kasikornbank Public vs. SCB X Public | Kasikornbank Public 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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