Correlation Between Krung Thai and Srithai Superware
Can any of the company-specific risk be diversified away by investing in both Krung Thai and Srithai Superware 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 Srithai Superware 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 Srithai Superware Public, you can compare the effects of market volatilities on Krung Thai and Srithai Superware 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 Srithai Superware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krung Thai and Srithai Superware.
Diversification Opportunities for Krung Thai and Srithai Superware
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Krung and Srithai is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Krung Thai Bank and Srithai Superware Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Srithai Superware 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 Srithai Superware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Srithai Superware Public has no effect on the direction of Krung Thai i.e., Krung Thai and Srithai Superware go up and down completely randomly.
Pair Corralation between Krung Thai and Srithai Superware
Assuming the 90 days trading horizon Krung Thai is expected to generate 56.43 times less return on investment than Srithai Superware. But when comparing it to its historical volatility, Krung Thai Bank is 73.12 times less risky than Srithai Superware. It trades about 0.11 of its potential returns per unit of risk. Srithai Superware Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 127.00 in Srithai Superware Public on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Srithai Superware Public or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krung Thai Bank vs. Srithai Superware Public
Performance |
| Timeline |
| Krung Thai Bank |
| Srithai Superware Public |
Krung Thai and Srithai Superware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krung Thai and Srithai Superware
The main advantage of trading using opposite Krung Thai and Srithai Superware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krung Thai position performs unexpectedly, Srithai Superware 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 Srithai Superware will offset losses from the drop in Srithai Superware's long position.| Krung Thai vs. The Siam Commercial | Krung Thai vs. Thai Oil Public | Krung Thai vs. Kasikornbank Public | Krung Thai vs. The Siam Cement |
| Srithai Superware vs. Krung Thai Bank | Srithai Superware vs. Halcyon Technology Public | Srithai Superware vs. Charoen Pokphand Foods | Srithai Superware vs. 2S Metal 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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