Correlation Between Lundin Energy and Krung Thai
Can any of the company-specific risk be diversified away by investing in both Lundin Energy and Krung Thai 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 Lundin Energy and Krung Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Energy AB and Krung Thai Bank, you can compare the effects of market volatilities on Lundin Energy and Krung Thai 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 Lundin Energy with a short position of Krung Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Energy and Krung Thai.
Diversification Opportunities for Lundin Energy and Krung Thai
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and Krung is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB and Krung Thai Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krung Thai Bank and Lundin Energy 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 Lundin Energy AB are associated (or correlated) with Krung Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krung Thai Bank has no effect on the direction of Lundin Energy i.e., Lundin Energy and Krung Thai go up and down completely randomly.
Pair Corralation between Lundin Energy and Krung Thai
Assuming the 90 days horizon Lundin Energy AB is expected to under-perform the Krung Thai. In addition to that, Lundin Energy is 1.53 times more volatile than Krung Thai Bank. It trades about -0.05 of its total potential returns per unit of risk. Krung Thai Bank is currently generating about 0.03 per unit of volatility. If you would invest 46.00 in Krung Thai Bank on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Krung Thai Bank or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lundin Energy AB vs. Krung Thai Bank
Performance |
| Timeline |
| Lundin Energy AB |
| Krung Thai Bank |
Lundin Energy and Krung Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Energy and Krung Thai
The main advantage of trading using opposite Lundin Energy and Krung Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Energy position performs unexpectedly, Krung Thai 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 Krung Thai will offset losses from the drop in Krung Thai's long position.| Lundin Energy vs. Air New Zealand | Lundin Energy vs. Corsair Gaming | Lundin Energy vs. Gaztransport Technigaz SA | Lundin Energy vs. Alaska Air Group |
| Krung Thai vs. STORE ELECTRONIC | Krung Thai vs. Meiko Electronics Co | Krung Thai vs. Richardson Electronics | Krung Thai vs. Transportadora de Gas |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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