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
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Krung and Charan is -0.74. 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 41.65 times less return on investment than Charan Insurance. But when comparing it to its historical volatility, Krung Thai Bank is 73.94 times less risky than Charan Insurance. It trades about 0.17 of its potential returns per unit of risk. Charan Insurance Public is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Charan Insurance Public on November 2, 2024 and sell it today you would earn a total of 2,030 from holding Charan Insurance Public or generate 9.223372036854776E16% 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. 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. Bangkok Bank Public | Krung Thai vs. SCB X Public | Krung Thai vs. Kasikornbank Public | Krung Thai vs. PTT Public |
| Charan Insurance vs. Bhiraj Office Leasehold | Charan Insurance vs. Charoen Pokphand Foods | Charan Insurance vs. Exotic Food Public | Charan Insurance vs. Chiangmai Frozen Foods |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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