Correlation Between Kiatnakin Phatra and Gulf Energy
Can any of the company-specific risk be diversified away by investing in both Kiatnakin Phatra and Gulf Energy 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 Kiatnakin Phatra and Gulf Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kiatnakin Phatra Bank and Gulf Energy Development, you can compare the effects of market volatilities on Kiatnakin Phatra and Gulf Energy 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 Kiatnakin Phatra with a short position of Gulf Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiatnakin Phatra and Gulf Energy.
Diversification Opportunities for Kiatnakin Phatra and Gulf Energy
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kiatnakin and Gulf is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kiatnakin Phatra Bank and Gulf Energy Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Energy Development and Kiatnakin Phatra 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 Kiatnakin Phatra Bank are associated (or correlated) with Gulf Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Energy Development has no effect on the direction of Kiatnakin Phatra i.e., Kiatnakin Phatra and Gulf Energy go up and down completely randomly.
Pair Corralation between Kiatnakin Phatra and Gulf Energy
Assuming the 90 days trading horizon Kiatnakin Phatra Bank is expected to under-perform the Gulf Energy. But the stock apears to be less risky and, when comparing its historical volatility, Kiatnakin Phatra Bank is 1.03 times less risky than Gulf Energy. The stock trades about -0.03 of its potential returns per unit of risk. The Gulf Energy Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,184 in Gulf Energy Development on September 2, 2024 and sell it today you would earn a total of 866.00 from holding Gulf Energy Development or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kiatnakin Phatra Bank vs. Gulf Energy Development
Performance |
| Timeline |
| Kiatnakin Phatra Bank |
| Gulf Energy Development |
Kiatnakin Phatra and Gulf Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kiatnakin Phatra and Gulf Energy
The main advantage of trading using opposite Kiatnakin Phatra and Gulf Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiatnakin Phatra position performs unexpectedly, Gulf Energy 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 Gulf Energy will offset losses from the drop in Gulf Energy's long position.| Kiatnakin Phatra vs. TISCO Financial Group | Kiatnakin Phatra vs. Kasikornbank Public | Kiatnakin Phatra vs. Thanachart Capital Public | Kiatnakin Phatra vs. SCB X Public |
| Gulf Energy vs. Energy Absolute Public | Gulf Energy vs. BGrimm Power Public | Gulf Energy vs. Global Power Synergy | Gulf Energy vs. CP ALL 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |