Correlation Between Krung Thai and Mida Leasing
Can any of the company-specific risk be diversified away by investing in both Krung Thai and Mida Leasing 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 Mida Leasing 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 Mida Leasing Public, you can compare the effects of market volatilities on Krung Thai and Mida Leasing 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 Mida Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krung Thai and Mida Leasing.
Diversification Opportunities for Krung Thai and Mida Leasing
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Krung and Mida is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Krung Thai Bank and Mida Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mida Leasing 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 Mida Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mida Leasing Public has no effect on the direction of Krung Thai i.e., Krung Thai and Mida Leasing go up and down completely randomly.
Pair Corralation between Krung Thai and Mida Leasing
Assuming the 90 days trading horizon Krung Thai is expected to generate 18.76 times less return on investment than Mida Leasing. But when comparing it to its historical volatility, Krung Thai Bank is 34.88 times less risky than Mida Leasing. It trades about 0.07 of its potential returns per unit of risk. Mida Leasing Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 117.00 in Mida Leasing Public on November 2, 2024 and sell it today you would lose (68.00) from holding Mida Leasing Public or give up 58.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Krung Thai Bank vs. Mida Leasing Public
Performance |
| Timeline |
| Krung Thai Bank |
| Mida Leasing Public |
Krung Thai and Mida Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krung Thai and Mida Leasing
The main advantage of trading using opposite Krung Thai and Mida Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krung Thai position performs unexpectedly, Mida Leasing 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 Mida Leasing will offset losses from the drop in Mida Leasing'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 |
| Mida Leasing vs. KGI Securities Public | Mida Leasing vs. Krungthai Car Rent | Mida Leasing vs. Eastern Commercial Leasing | Mida Leasing vs. JMT Network Services |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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