Correlation Between KCE Electronics and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and Bangkok Bank 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 KCE Electronics and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KCE Electronics Public and Bangkok Bank Public, you can compare the effects of market volatilities on KCE Electronics and Bangkok Bank 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 KCE Electronics with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and Bangkok Bank.
Diversification Opportunities for KCE Electronics and Bangkok Bank
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KCE and Bangkok is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and Bangkok Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Bank Public and KCE Electronics 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 KCE Electronics Public are associated (or correlated) with Bangkok Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Bank Public has no effect on the direction of KCE Electronics i.e., KCE Electronics and Bangkok Bank go up and down completely randomly.
Pair Corralation between KCE Electronics and Bangkok Bank
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the Bangkok Bank. In addition to that, KCE Electronics is 1.87 times more volatile than Bangkok Bank Public. It trades about -0.1 of its total potential returns per unit of risk. Bangkok Bank Public is currently generating about 0.05 per unit of volatility. If you would invest 13,411 in Bangkok Bank Public on August 28, 2024 and sell it today you would earn a total of 1,439 from holding Bangkok Bank Public or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCE Electronics Public vs. Bangkok Bank Public
Performance |
| Timeline |
| KCE Electronics Public |
| Bangkok Bank Public |
KCE Electronics and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and Bangkok Bank
The main advantage of trading using opposite KCE Electronics and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, Bangkok Bank 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 Bangkok Bank will offset losses from the drop in Bangkok Bank's long position.| KCE Electronics vs. Hana Microelectronics Public | KCE Electronics vs. Kasikornbank Public | KCE Electronics vs. Land and Houses | KCE Electronics vs. Indorama Ventures PCL |
| Bangkok Bank vs. Thai Energy Storage | Bangkok Bank vs. Royal Orchid Hotel | Bangkok Bank vs. Grand Canal Land | Bangkok Bank vs. PRG 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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