Correlation Between Krung Thai and Charan Insurance
Can any of the company-specific risk be diversified away by investing in both Krung Thai and Charan Insurance 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 Charan Insurance 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 Charan Insurance Public, you can compare the effects of market volatilities on Krung Thai and Charan Insurance 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 Charan Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krung Thai and Charan Insurance.
Diversification Opportunities for Krung Thai and Charan Insurance
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Krung and Charan is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Krung Thai Bank and Charan Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charan Insurance Public 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 Charan Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charan Insurance Public has no effect on the direction of Krung Thai i.e., Krung Thai and Charan Insurance go up and down completely randomly.
Pair Corralation between Krung Thai and Charan Insurance
Assuming the 90 days trading horizon Krung Thai is expected to generate 79.39 times less return on investment than Charan Insurance. But when comparing it to its historical volatility, Krung Thai Bank is 41.52 times less risky than Charan Insurance. It trades about 0.03 of its potential returns per unit of risk. Charan Insurance Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,515 in Charan Insurance Public on September 12, 2024 and sell it today you would lose (315.00) from holding Charan Insurance Public or give up 12.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krung Thai Bank vs. Charan Insurance Public
Performance |
| Timeline |
| Krung Thai Bank |
| Charan Insurance Public |
Krung Thai and Charan Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krung Thai and Charan Insurance
The main advantage of trading using opposite Krung Thai and Charan Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krung Thai position performs unexpectedly, Charan Insurance 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 Charan Insurance will offset losses from the drop in Charan Insurance'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 |
| Charan Insurance vs. Global Green Chemicals | Charan Insurance vs. Krung Thai Bank | Charan Insurance vs. Muang Thai Insurance | Charan Insurance vs. Indara Insurance 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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