Correlation Between Muang Thai and KGI Securities
Can any of the company-specific risk be diversified away by investing in both Muang Thai and KGI Securities 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 Muang Thai and KGI Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muang Thai Insurance and KGI Securities Public, you can compare the effects of market volatilities on Muang Thai and KGI Securities 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 Muang Thai with a short position of KGI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muang Thai and KGI Securities.
Diversification Opportunities for Muang Thai and KGI Securities
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Muang and KGI is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Muang Thai Insurance and KGI Securities Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGI Securities Public and Muang Thai 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 Muang Thai Insurance are associated (or correlated) with KGI Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGI Securities Public has no effect on the direction of Muang Thai i.e., Muang Thai and KGI Securities go up and down completely randomly.
Pair Corralation between Muang Thai and KGI Securities
Assuming the 90 days trading horizon Muang Thai Insurance is expected to generate 1.61 times more return on investment than KGI Securities. However, Muang Thai is 1.61 times more volatile than KGI Securities Public. It trades about -0.02 of its potential returns per unit of risk. KGI Securities Public is currently generating about -0.18 per unit of risk. If you would invest 10,750 in Muang Thai Insurance on September 12, 2024 and sell it today you would lose (150.00) from holding Muang Thai Insurance or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Muang Thai Insurance vs. KGI Securities Public
Performance |
| Timeline |
| Muang Thai Insurance |
| KGI Securities Public |
Muang Thai and KGI Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muang Thai and KGI Securities
The main advantage of trading using opposite Muang Thai and KGI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muang Thai position performs unexpectedly, KGI Securities 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 KGI Securities will offset losses from the drop in KGI Securities' long position.| Muang Thai vs. Bangkok Life Assurance | Muang Thai vs. Karmarts Public | Muang Thai vs. Kang Yong Electric | Muang Thai vs. Kiatnakin Phatra Bank |
| KGI Securities vs. Indara Insurance Public | KGI Securities vs. Asia Medical Agricultural | KGI Securities vs. Charan Insurance Public | KGI Securities vs. Teka Construction PCL |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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