Correlation Between KRUNGTHAI CARD and LIBERTY DEFENSE
Can any of the company-specific risk be diversified away by investing in both KRUNGTHAI CARD and LIBERTY DEFENSE 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 KRUNGTHAI CARD and LIBERTY DEFENSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KRUNGTHAI CARD FGN and LIBERTY DEFENSE H, you can compare the effects of market volatilities on KRUNGTHAI CARD and LIBERTY DEFENSE 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 KRUNGTHAI CARD with a short position of LIBERTY DEFENSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRUNGTHAI CARD and LIBERTY DEFENSE.
Diversification Opportunities for KRUNGTHAI CARD and LIBERTY DEFENSE
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KRUNGTHAI and LIBERTY is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding KRUNGTHAI CARD FGN and LIBERTY DEFENSE H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIBERTY DEFENSE H and KRUNGTHAI CARD 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 KRUNGTHAI CARD FGN are associated (or correlated) with LIBERTY DEFENSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIBERTY DEFENSE H has no effect on the direction of KRUNGTHAI CARD i.e., KRUNGTHAI CARD and LIBERTY DEFENSE go up and down completely randomly.
Pair Corralation between KRUNGTHAI CARD and LIBERTY DEFENSE
Assuming the 90 days trading horizon KRUNGTHAI CARD is expected to generate 11.89 times less return on investment than LIBERTY DEFENSE. But when comparing it to its historical volatility, KRUNGTHAI CARD FGN is 8.42 times less risky than LIBERTY DEFENSE. It trades about 0.04 of its potential returns per unit of risk. LIBERTY DEFENSE H is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 80.00 in LIBERTY DEFENSE H on October 16, 2024 and sell it today you would lose (24.00) from holding LIBERTY DEFENSE H or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KRUNGTHAI CARD FGN vs. LIBERTY DEFENSE H
Performance |
| Timeline |
| KRUNGTHAI CARD FGN |
| LIBERTY DEFENSE H |
KRUNGTHAI CARD and LIBERTY DEFENSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KRUNGTHAI CARD and LIBERTY DEFENSE
The main advantage of trading using opposite KRUNGTHAI CARD and LIBERTY DEFENSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRUNGTHAI CARD position performs unexpectedly, LIBERTY DEFENSE 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 LIBERTY DEFENSE will offset losses from the drop in LIBERTY DEFENSE's long position.| KRUNGTHAI CARD vs. Visa Inc | KRUNGTHAI CARD vs. Discover Financial Services | KRUNGTHAI CARD vs. Superior Plus Corp | KRUNGTHAI CARD vs. NMI Holdings |
| LIBERTY DEFENSE vs. ASSA ABLOY AB | LIBERTY DEFENSE vs. Halma plc | LIBERTY DEFENSE vs. Allegion plc | LIBERTY DEFENSE vs. Superior Plus Corp |
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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