Correlation Between Kasikornbank Public and PT Bank
Can any of the company-specific risk be diversified away by investing in both Kasikornbank Public and PT 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 Kasikornbank Public and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasikornbank Public Co and PT Bank Central, you can compare the effects of market volatilities on Kasikornbank Public and PT 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 Kasikornbank Public with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasikornbank Public and PT Bank.
Diversification Opportunities for Kasikornbank Public and PT Bank
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kasikornbank and PBCRF is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public Co and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central and Kasikornbank Public 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 Kasikornbank Public Co are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and PT Bank go up and down completely randomly.
Pair Corralation between Kasikornbank Public and PT Bank
Assuming the 90 days horizon Kasikornbank Public Co is expected to under-perform the PT Bank. But the pink sheet apears to be less risky and, when comparing its historical volatility, Kasikornbank Public Co is 1.5 times less risky than PT Bank. The pink sheet trades about -0.09 of its potential returns per unit of risk. The PT Bank Central is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 70.00 in PT Bank Central on August 29, 2024 and sell it today you would lose (2.00) from holding PT Bank Central or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kasikornbank Public Co vs. PT Bank Central
Performance |
| Timeline |
| Kasikornbank Public |
| PT Bank Central |
Kasikornbank Public and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kasikornbank Public and PT Bank
The main advantage of trading using opposite Kasikornbank Public and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasikornbank Public position performs unexpectedly, PT 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 PT Bank will offset losses from the drop in PT Bank's long position.The idea behind Kasikornbank Public Co and PT Bank Central 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.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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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