Correlation Between Krungthai Card and Home Product
Can any of the company-specific risk be diversified away by investing in both Krungthai Card and Home Product 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 Krungthai Card and Home Product into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krungthai Card PCL and Home Product Center, you can compare the effects of market volatilities on Krungthai Card and Home Product 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 Krungthai Card with a short position of Home Product. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krungthai Card and Home Product.
Diversification Opportunities for Krungthai Card and Home Product
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Krungthai and Home is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Krungthai Card PCL and Home Product Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Product Center and Krungthai Card 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 Krungthai Card PCL are associated (or correlated) with Home Product. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Product Center has no effect on the direction of Krungthai Card i.e., Krungthai Card and Home Product go up and down completely randomly.
Pair Corralation between Krungthai Card and Home Product
Assuming the 90 days trading horizon Krungthai Card PCL is expected to generate 0.76 times more return on investment than Home Product. However, Krungthai Card PCL is 1.31 times less risky than Home Product. It trades about 0.02 of its potential returns per unit of risk. Home Product Center is currently generating about -0.03 per unit of risk. If you would invest 4,444 in Krungthai Card PCL on September 4, 2024 and sell it today you would earn a total of 231.00 from holding Krungthai Card PCL or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Krungthai Card PCL vs. Home Product Center
Performance |
| Timeline |
| Krungthai Card PCL |
| Home Product Center |
Krungthai Card and Home Product Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krungthai Card and Home Product
The main advantage of trading using opposite Krungthai Card and Home Product positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krungthai Card position performs unexpectedly, Home Product 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 Home Product will offset losses from the drop in Home Product's long position.| Krungthai Card vs. Thai Steel Cable | Krungthai Card vs. Tropical Canning Public | Krungthai Card vs. RB Food Supply | Krungthai Card vs. Eureka Design Public |
| Home Product vs. CP ALL Public | Home Product vs. Bangkok Dusit Medical | Home Product vs. Central Pattana Public | Home Product vs. Advanced Info Service |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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