Correlation Between Minor International and Kaset Thai
Can any of the company-specific risk be diversified away by investing in both Minor International and Kaset 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 Minor International and Kaset Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minor International Public and Kaset Thai International, you can compare the effects of market volatilities on Minor International and Kaset 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 Minor International with a short position of Kaset Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minor International and Kaset Thai.
Diversification Opportunities for Minor International and Kaset Thai
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Minor and Kaset is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Minor International Public and Kaset Thai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaset Thai International and Minor International 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 Minor International Public are associated (or correlated) with Kaset Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaset Thai International has no effect on the direction of Minor International i.e., Minor International and Kaset Thai go up and down completely randomly.
Pair Corralation between Minor International and Kaset Thai
Assuming the 90 days trading horizon Minor International Public is expected to generate 1.16 times more return on investment than Kaset Thai. However, Minor International is 1.16 times more volatile than Kaset Thai International. It trades about 0.06 of its potential returns per unit of risk. Kaset Thai International is currently generating about -0.02 per unit of risk. If you would invest 2,700 in Minor International Public on August 28, 2024 and sell it today you would earn a total of 50.00 from holding Minor International Public or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minor International Public vs. Kaset Thai International
Performance |
| Timeline |
| Minor International |
| Kaset Thai International |
Minor International and Kaset Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minor International and Kaset Thai
The main advantage of trading using opposite Minor International and Kaset Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minor International position performs unexpectedly, Kaset 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 Kaset Thai will offset losses from the drop in Kaset Thai's long position.| Minor International vs. CP ALL Public | Minor International vs. Bangkok Dusit Medical | Minor International vs. Airports of Thailand | Minor International vs. Kasikornbank 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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