Correlation Between Krung Thai and TOA PAINT
Can any of the company-specific risk be diversified away by investing in both Krung Thai and TOA PAINT 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 TOA PAINT 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 TOA PAINT, you can compare the effects of market volatilities on Krung Thai and TOA PAINT 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 TOA PAINT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krung Thai and TOA PAINT.
Diversification Opportunities for Krung Thai and TOA PAINT
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Krung and TOA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Krung Thai Bank and TOA PAINT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOA PAINT 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 TOA PAINT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOA PAINT has no effect on the direction of Krung Thai i.e., Krung Thai and TOA PAINT go up and down completely randomly.
Pair Corralation between Krung Thai and TOA PAINT
Assuming the 90 days trading horizon Krung Thai Bank is expected to generate 0.26 times more return on investment than TOA PAINT. However, Krung Thai Bank is 3.89 times less risky than TOA PAINT. It trades about 0.27 of its potential returns per unit of risk. TOA PAINT is currently generating about -0.15 per unit of risk. If you would invest 2,090 in Krung Thai Bank on October 22, 2024 and sell it today you would earn a total of 100.00 from holding Krung Thai Bank or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Krung Thai Bank vs. TOA PAINT
Performance |
| Timeline |
| Krung Thai Bank |
| TOA PAINT |
Krung Thai and TOA PAINT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krung Thai and TOA PAINT
The main advantage of trading using opposite Krung Thai and TOA PAINT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krung Thai position performs unexpectedly, TOA PAINT 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 TOA PAINT will offset losses from the drop in TOA PAINT'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 |
| TOA PAINT vs. Jasmine Telecom Systems | TOA PAINT vs. Sriracha Construction Public | TOA PAINT vs. Bhiraj Office Leasehold | TOA PAINT vs. CHUWIT FARM 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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