Correlation Between Kiatnakin Phatra and Mega Lifesciences
Can any of the company-specific risk be diversified away by investing in both Kiatnakin Phatra and Mega Lifesciences 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 Mega Lifesciences 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 Mega Lifesciences Public, you can compare the effects of market volatilities on Kiatnakin Phatra and Mega Lifesciences 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 Mega Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiatnakin Phatra and Mega Lifesciences.
Diversification Opportunities for Kiatnakin Phatra and Mega Lifesciences
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kiatnakin and Mega is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kiatnakin Phatra Bank and Mega Lifesciences Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Lifesciences Public 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 Mega Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Lifesciences Public has no effect on the direction of Kiatnakin Phatra i.e., Kiatnakin Phatra and Mega Lifesciences go up and down completely randomly.
Pair Corralation between Kiatnakin Phatra and Mega Lifesciences
Assuming the 90 days trading horizon Kiatnakin Phatra Bank is expected to under-perform the Mega Lifesciences. But the stock apears to be less risky and, when comparing its historical volatility, Kiatnakin Phatra Bank is 1.02 times less risky than Mega Lifesciences. The stock trades about -0.02 of its potential returns per unit of risk. The Mega Lifesciences Public is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,886 in Mega Lifesciences Public on August 31, 2024 and sell it today you would lose (361.00) from holding Mega Lifesciences Public or give up 9.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kiatnakin Phatra Bank vs. Mega Lifesciences Public
Performance |
| Timeline |
| Kiatnakin Phatra Bank |
| Mega Lifesciences Public |
Kiatnakin Phatra and Mega Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kiatnakin Phatra and Mega Lifesciences
The main advantage of trading using opposite Kiatnakin Phatra and Mega Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiatnakin Phatra position performs unexpectedly, Mega Lifesciences 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 Mega Lifesciences will offset losses from the drop in Mega Lifesciences' long position.The idea behind Kiatnakin Phatra Bank and Mega Lifesciences Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mega Lifesciences vs. AP Public | Mega Lifesciences vs. Advanced Information Technology | Mega Lifesciences vs. AJ Plast Public | Mega Lifesciences vs. Berli Jucker 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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