Correlation Between Krung Thai and Origin Property
Can any of the company-specific risk be diversified away by investing in both Krung Thai and Origin Property 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 Origin Property 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 Origin Property PCL, you can compare the effects of market volatilities on Krung Thai and Origin Property 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 Origin Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krung Thai and Origin Property.
Diversification Opportunities for Krung Thai and Origin Property
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Krung and Origin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Krung Thai Bank and Origin Property PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Property 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 Origin Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Property PCL has no effect on the direction of Krung Thai i.e., Krung Thai and Origin Property go up and down completely randomly.
Pair Corralation between Krung Thai and Origin Property
Assuming the 90 days trading horizon Krung Thai Bank is expected to generate 0.45 times more return on investment than Origin Property. However, Krung Thai Bank is 2.21 times less risky than Origin Property. It trades about 0.1 of its potential returns per unit of risk. Origin Property PCL is currently generating about -0.05 per unit of risk. If you would invest 1,770 in Krung Thai Bank on September 5, 2024 and sell it today you would earn a total of 260.00 from holding Krung Thai Bank or generate 14.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krung Thai Bank vs. Origin Property PCL
Performance |
| Timeline |
| Krung Thai Bank |
| Origin Property PCL |
Krung Thai and Origin Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krung Thai and Origin Property
The main advantage of trading using opposite Krung Thai and Origin Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krung Thai position performs unexpectedly, Origin Property 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 Origin Property will offset losses from the drop in Origin Property'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 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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