Correlation Between Krung Thai and ABSOLUTE CLEAN
Can any of the company-specific risk be diversified away by investing in both Krung Thai and ABSOLUTE CLEAN 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 Krung Thai and ABSOLUTE CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krung Thai Bank and ABSOLUTE CLEAN ENERGY, you can compare the effects of market volatilities on Krung Thai and ABSOLUTE CLEAN 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 Krung Thai with a short position of ABSOLUTE CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krung Thai and ABSOLUTE CLEAN.
Diversification Opportunities for Krung Thai and ABSOLUTE CLEAN
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Krung and ABSOLUTE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Krung Thai Bank and ABSOLUTE CLEAN ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABSOLUTE CLEAN ENERGY and Krung Thai 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 Krung Thai Bank are associated (or correlated) with ABSOLUTE CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABSOLUTE CLEAN ENERGY has no effect on the direction of Krung Thai i.e., Krung Thai and ABSOLUTE CLEAN go up and down completely randomly.
Pair Corralation between Krung Thai and ABSOLUTE CLEAN
Assuming the 90 days trading horizon Krung Thai Bank is expected to generate 0.62 times more return on investment than ABSOLUTE CLEAN. However, Krung Thai Bank is 1.62 times less risky than ABSOLUTE CLEAN. It trades about 0.01 of its potential returns per unit of risk. ABSOLUTE CLEAN ENERGY is currently generating about -0.04 per unit of risk. If you would invest 1,950 in Krung Thai Bank on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Krung Thai Bank or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krung Thai Bank vs. ABSOLUTE CLEAN ENERGY
Performance |
| Timeline |
| Krung Thai Bank |
| ABSOLUTE CLEAN ENERGY |
Krung Thai and ABSOLUTE CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krung Thai and ABSOLUTE CLEAN
The main advantage of trading using opposite Krung Thai and ABSOLUTE CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krung Thai position performs unexpectedly, ABSOLUTE CLEAN 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 ABSOLUTE CLEAN will offset losses from the drop in ABSOLUTE CLEAN's long position.| Krung Thai vs. The Siam Commercial | Krung Thai vs. Thai Oil Public | Krung Thai vs. Thai Union Group | Krung Thai vs. Kasikornbank Public |
| ABSOLUTE CLEAN vs. Asia Biomass Public | ABSOLUTE CLEAN vs. JCK Hospitality Public | ABSOLUTE CLEAN vs. JCK International Public | ABSOLUTE CLEAN vs. Green Resources 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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