Correlation Between Krung Thai and Krungthai Card
Can any of the company-specific risk be diversified away by investing in both Krung Thai and Krungthai Card 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 Krungthai Card 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 Krungthai Card PCL, you can compare the effects of market volatilities on Krung Thai and Krungthai Card 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 Krungthai Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krung Thai and Krungthai Card.
Diversification Opportunities for Krung Thai and Krungthai Card
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Krung and Krungthai is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Krung Thai Bank and Krungthai Card PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krungthai Card PCL 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 Krungthai Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krungthai Card PCL has no effect on the direction of Krung Thai i.e., Krung Thai and Krungthai Card go up and down completely randomly.
Pair Corralation between Krung Thai and Krungthai Card
Assuming the 90 days trading horizon Krung Thai Bank is expected to generate 0.71 times more return on investment than Krungthai Card. However, Krung Thai Bank is 1.4 times less risky than Krungthai Card. It trades about -0.17 of its potential returns per unit of risk. Krungthai Card PCL is currently generating about -0.2 per unit of risk. If you would invest 2,090 in Krung Thai Bank on August 24, 2024 and sell it today you would lose (50.00) from holding Krung Thai Bank or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Krung Thai Bank vs. Krungthai Card PCL
Performance |
| Timeline |
| Krung Thai Bank |
| Krungthai Card PCL |
Krung Thai and Krungthai Card Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krung Thai and Krungthai Card
The main advantage of trading using opposite Krung Thai and Krungthai Card positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krung Thai position performs unexpectedly, Krungthai Card 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 Krungthai Card will offset losses from the drop in Krungthai Card'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 |
| Krungthai Card vs. Krung Thai Bank | Krungthai Card vs. SCB X Public | Krungthai Card vs. Bangkok Bank Public | Krungthai Card vs. PTT 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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