Correlation Between Krungthai Card and Thai Steel
Can any of the company-specific risk be diversified away by investing in both Krungthai Card and Thai Steel 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 Thai Steel 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 Thai Steel Cable, you can compare the effects of market volatilities on Krungthai Card and Thai Steel 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 Thai Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krungthai Card and Thai Steel.
Diversification Opportunities for Krungthai Card and Thai Steel
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Krungthai and Thai is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Krungthai Card PCL and Thai Steel Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Steel Cable 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 Thai Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Steel Cable has no effect on the direction of Krungthai Card i.e., Krungthai Card and Thai Steel go up and down completely randomly.
Pair Corralation between Krungthai Card and Thai Steel
Assuming the 90 days trading horizon Krungthai Card PCL is expected to under-perform the Thai Steel. In addition to that, Krungthai Card is 1.43 times more volatile than Thai Steel Cable. It trades about -0.02 of its total potential returns per unit of risk. Thai Steel Cable is currently generating about 0.23 per unit of volatility. If you would invest 1,430 in Thai Steel Cable on September 4, 2024 and sell it today you would earn a total of 60.00 from holding Thai Steel Cable or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Krungthai Card PCL vs. Thai Steel Cable
Performance |
| Timeline |
| Krungthai Card PCL |
| Thai Steel Cable |
Krungthai Card and Thai Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krungthai Card and Thai Steel
The main advantage of trading using opposite Krungthai Card and Thai Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krungthai Card position performs unexpectedly, Thai Steel 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 Thai Steel will offset losses from the drop in Thai Steel'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 |
| Thai Steel vs. United Paper Public | Thai Steel vs. TMT Steel Public | Thai Steel vs. Thai Stanley Electric | Thai Steel vs. Inoue Rubber 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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