Correlation Between Krung Thai and Samart Public
Can any of the company-specific risk be diversified away by investing in both Krung Thai and Samart Public 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 Samart Public 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 Samart Public, you can compare the effects of market volatilities on Krung Thai and Samart Public 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 Samart Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krung Thai and Samart Public.
Diversification Opportunities for Krung Thai and Samart Public
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Krung and Samart is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Krung Thai Bank and Samart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samart 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 Samart Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samart Public has no effect on the direction of Krung Thai i.e., Krung Thai and Samart Public go up and down completely randomly.
Pair Corralation between Krung Thai and Samart Public
Assuming the 90 days trading horizon Krung Thai Bank is expected to generate 1.14 times more return on investment than Samart Public. However, Krung Thai is 1.14 times more volatile than Samart Public. It trades about 0.25 of its potential returns per unit of risk. Samart Public is currently generating about -0.14 per unit of risk. If you would invest 2,100 in Krung Thai Bank on November 3, 2024 and sell it today you would earn a total of 190.00 from holding Krung Thai Bank or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krung Thai Bank vs. Samart Public
Performance |
| Timeline |
| Krung Thai Bank |
| Samart Public |
Krung Thai and Samart Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krung Thai and Samart Public
The main advantage of trading using opposite Krung Thai and Samart Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krung Thai position performs unexpectedly, Samart Public 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 Samart Public will offset losses from the drop in Samart Public's long position.| Krung Thai vs. The Siam Commercial | Krung Thai vs. Thai Union Group | Krung Thai vs. Kasikornbank Public | Krung Thai vs. The Siam Cement |
| Samart Public vs. Bangkok Union Insurance | Samart Public vs. The Navakij Insurance | Samart Public vs. CENTRAL RETAIL P | Samart Public 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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