Correlation Between KGI Securities and Muang Thai
Can any of the company-specific risk be diversified away by investing in both KGI Securities and Muang 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 KGI Securities and Muang Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KGI Securities Public and Muang Thai Insurance, you can compare the effects of market volatilities on KGI Securities and Muang 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 KGI Securities with a short position of Muang Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGI Securities and Muang Thai.
Diversification Opportunities for KGI Securities and Muang Thai
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KGI and Muang is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities Public and Muang Thai Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muang Thai Insurance and KGI Securities 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 KGI Securities Public are associated (or correlated) with Muang Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muang Thai Insurance has no effect on the direction of KGI Securities i.e., KGI Securities and Muang Thai go up and down completely randomly.
Pair Corralation between KGI Securities and Muang Thai
Assuming the 90 days trading horizon KGI Securities Public is expected to under-perform the Muang Thai. But the stock apears to be less risky and, when comparing its historical volatility, KGI Securities Public is 1.51 times less risky than Muang Thai. The stock trades about -0.25 of its potential returns per unit of risk. The Muang Thai Insurance is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 11,300 in Muang Thai Insurance on September 13, 2024 and sell it today you would lose (600.00) from holding Muang Thai Insurance or give up 5.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KGI Securities Public vs. Muang Thai Insurance
Performance |
| Timeline |
| KGI Securities Public |
| Muang Thai Insurance |
KGI Securities and Muang Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KGI Securities and Muang Thai
The main advantage of trading using opposite KGI Securities and Muang Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGI Securities position performs unexpectedly, Muang 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 Muang Thai will offset losses from the drop in Muang Thai's long position.| KGI Securities vs. Indara Insurance Public | KGI Securities vs. Asia Medical Agricultural | KGI Securities vs. Charan Insurance Public | KGI Securities vs. Teka Construction PCL |
| Muang Thai vs. Bangkok Life Assurance | Muang Thai vs. Karmarts Public | Muang Thai vs. Kang Yong Electric | Muang Thai vs. Kiatnakin Phatra Bank |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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