Correlation Between Krung Thai and TISCO Financial
Can any of the company-specific risk be diversified away by investing in both Krung Thai and TISCO Financial 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 TISCO Financial 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 TISCO Financial Group, you can compare the effects of market volatilities on Krung Thai and TISCO Financial 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 TISCO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krung Thai and TISCO Financial.
Diversification Opportunities for Krung Thai and TISCO Financial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Krung and TISCO is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Krung Thai Bank and TISCO Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TISCO Financial Group 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 TISCO Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TISCO Financial Group has no effect on the direction of Krung Thai i.e., Krung Thai and TISCO Financial go up and down completely randomly.
Pair Corralation between Krung Thai and TISCO Financial
Assuming the 90 days trading horizon Krung Thai Bank is expected to generate 3.59 times more return on investment than TISCO Financial. However, Krung Thai is 3.59 times more volatile than TISCO Financial Group. It trades about 0.34 of its potential returns per unit of risk. TISCO Financial Group is currently generating about 0.11 per unit of risk. If you would invest 2,100 in Krung Thai Bank on October 31, 2024 and sell it today you would earn a total of 240.00 from holding Krung Thai Bank or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krung Thai Bank vs. TISCO Financial Group
Performance |
| Timeline |
| Krung Thai Bank |
| TISCO Financial Group |
Krung Thai and TISCO Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krung Thai and TISCO Financial
The main advantage of trading using opposite Krung Thai and TISCO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krung Thai position performs unexpectedly, TISCO Financial 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 TISCO Financial will offset losses from the drop in TISCO Financial'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 |
| TISCO Financial vs. Kasikornbank Public | TISCO Financial vs. Kiatnakin Phatra Bank | TISCO Financial vs. SCB X Public | TISCO Financial vs. Bangkok Bank 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |