Correlation Between KRUNG THAI and PT Bank
Can any of the company-specific risk be diversified away by investing in both KRUNG THAI and PT Bank 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 PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KRUNG THAI FGN and PT Bank Central, you can compare the effects of market volatilities on KRUNG THAI and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRUNG THAI and PT Bank.
Diversification Opportunities for KRUNG THAI and PT Bank
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KRUNG and BZG2 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding KRUNG THAI FGN and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central 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 FGN are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of KRUNG THAI i.e., KRUNG THAI and PT Bank go up and down completely randomly.
Pair Corralation between KRUNG THAI and PT Bank
Assuming the 90 days trading horizon KRUNG THAI is expected to generate 1.1 times less return on investment than PT Bank. But when comparing it to its historical volatility, KRUNG THAI FGN is 1.34 times less risky than PT Bank. It trades about 0.03 of its potential returns per unit of risk. PT Bank Central is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 51.00 in PT Bank Central on September 3, 2024 and sell it today you would earn a total of 6.00 from holding PT Bank Central or generate 11.76% 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 FGN vs. PT Bank Central
Performance |
| Timeline |
| KRUNG THAI FGN |
| PT Bank Central |
KRUNG THAI and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KRUNG THAI and PT Bank
The main advantage of trading using opposite KRUNG THAI and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRUNG THAI position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| KRUNG THAI vs. Bangkok Bank Public | KRUNG THAI vs. Kasikornbank Public | KRUNG THAI vs. Krung Thai Bank | KRUNG THAI vs. TMBThanachart Bank Public |
| PT Bank vs. Vulcan Materials | PT Bank vs. RYU Apparel | PT Bank vs. THORNEY TECHS LTD | PT Bank vs. Hyster Yale Materials Handling |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |