Correlation Between OtelloASA and Krung Thai
Can any of the company-specific risk be diversified away by investing in both OtelloASA 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 OtelloASA and Krung Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otello ASA and Krung Thai Bank, you can compare the effects of market volatilities on OtelloASA 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 OtelloASA with a short position of Krung Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of OtelloASA and Krung Thai.
Diversification Opportunities for OtelloASA and Krung Thai
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between OtelloASA and Krung is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Otello ASA 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 OtelloASA 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 Otello ASA 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 OtelloASA i.e., OtelloASA and Krung Thai go up and down completely randomly.
Pair Corralation between OtelloASA and Krung Thai
Assuming the 90 days horizon Otello ASA is expected to under-perform the Krung Thai. But the stock apears to be less risky and, when comparing its historical volatility, Otello ASA is 1.16 times less risky than Krung Thai. The stock trades about -0.01 of its potential returns per unit of risk. The Krung Thai Bank is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Krung Thai Bank on September 3, 2024 and sell it today you would earn a total of 15.00 from holding Krung Thai Bank or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Otello ASA vs. Krung Thai Bank
Performance |
| Timeline |
| Otello ASA |
| Krung Thai Bank |
OtelloASA and Krung Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OtelloASA and Krung Thai
The main advantage of trading using opposite OtelloASA and Krung Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OtelloASA 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.| OtelloASA vs. CapitaLand Investment Limited | OtelloASA vs. Aegean Airlines SA | OtelloASA vs. REINET INVESTMENTS SCA | OtelloASA vs. AEGEAN AIRLINES |
| Krung Thai vs. China Merchants Bank | Krung Thai vs. PT Bank Central | Krung Thai vs. DBS Group Holdings | Krung Thai vs. State Bank of |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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