Correlation Between Kiattana Transport and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both Kiattana Transport and Hwa Fong 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 Kiattana Transport and Hwa Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kiattana Transport Public and Hwa Fong Rubber, you can compare the effects of market volatilities on Kiattana Transport and Hwa Fong 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 Kiattana Transport with a short position of Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiattana Transport and Hwa Fong.
Diversification Opportunities for Kiattana Transport and Hwa Fong
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kiattana and Hwa is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kiattana Transport Public and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber and Kiattana Transport 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 Kiattana Transport Public are associated (or correlated) with Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of Kiattana Transport i.e., Kiattana Transport and Hwa Fong go up and down completely randomly.
Pair Corralation between Kiattana Transport and Hwa Fong
Assuming the 90 days trading horizon Kiattana Transport Public is expected to generate 1.0 times more return on investment than Hwa Fong. However, Kiattana Transport is 1.0 times more volatile than Hwa Fong Rubber. It trades about 0.04 of its potential returns per unit of risk. Hwa Fong Rubber is currently generating about 0.04 per unit of risk. If you would invest 41.00 in Kiattana Transport Public on September 12, 2024 and sell it today you would lose (9.00) from holding Kiattana Transport Public or give up 21.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kiattana Transport Public vs. Hwa Fong Rubber
Performance |
| Timeline |
| Kiattana Transport Public |
| Hwa Fong Rubber |
Kiattana Transport and Hwa Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kiattana Transport and Hwa Fong
The main advantage of trading using opposite Kiattana Transport and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiattana Transport position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong's long position.| Kiattana Transport vs. Hwa Fong Rubber | Kiattana Transport vs. Karmarts Public | Kiattana Transport vs. Jay Mart Public | Kiattana Transport vs. IRPC Public |
| Hwa Fong vs. Haad Thip Public | Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Inoue Rubber Public | Hwa Fong vs. Hana Microelectronics 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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