Correlation Between Krungdhep Sophon and Thonburi Medical
Can any of the company-specific risk be diversified away by investing in both Krungdhep Sophon and Thonburi Medical 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 Krungdhep Sophon and Thonburi Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krungdhep Sophon Public and Thonburi Medical Centre, you can compare the effects of market volatilities on Krungdhep Sophon and Thonburi Medical 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 Krungdhep Sophon with a short position of Thonburi Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krungdhep Sophon and Thonburi Medical.
Diversification Opportunities for Krungdhep Sophon and Thonburi Medical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Krungdhep and Thonburi is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Krungdhep Sophon Public and Thonburi Medical Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thonburi Medical Centre and Krungdhep Sophon 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 Krungdhep Sophon Public are associated (or correlated) with Thonburi Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thonburi Medical Centre has no effect on the direction of Krungdhep Sophon i.e., Krungdhep Sophon and Thonburi Medical go up and down completely randomly.
Pair Corralation between Krungdhep Sophon and Thonburi Medical
Assuming the 90 days trading horizon Krungdhep Sophon Public is expected to generate 1.0 times more return on investment than Thonburi Medical. However, Krungdhep Sophon is 1.0 times more volatile than Thonburi Medical Centre. It trades about 0.04 of its potential returns per unit of risk. Thonburi Medical Centre is currently generating about 0.04 per unit of risk. If you would invest 22,688 in Krungdhep Sophon Public on September 2, 2024 and sell it today you would earn a total of 6,112 from holding Krungdhep Sophon Public or generate 26.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Krungdhep Sophon Public vs. Thonburi Medical Centre
Performance |
| Timeline |
| Krungdhep Sophon Public |
| Thonburi Medical Centre |
Krungdhep Sophon and Thonburi Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krungdhep Sophon and Thonburi Medical
The main advantage of trading using opposite Krungdhep Sophon and Thonburi Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krungdhep Sophon position performs unexpectedly, Thonburi Medical 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 Thonburi Medical will offset losses from the drop in Thonburi Medical's long position.| Krungdhep Sophon vs. Thonburi Medical Centre | Krungdhep Sophon vs. Kang Yong Electric | Krungdhep Sophon vs. Jack Chia Industries | Krungdhep Sophon vs. Laguna Resorts Hotels |
| Thonburi Medical vs. AP Public | Thonburi Medical vs. Advanced Information Technology | Thonburi Medical vs. AJ Plast Public | Thonburi Medical vs. Berli Jucker 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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