Correlation Between Pato Chemical and Kiatnakin Phatra
Can any of the company-specific risk be diversified away by investing in both Pato Chemical and Kiatnakin Phatra 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 Pato Chemical and Kiatnakin Phatra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pato Chemical Industry and Kiatnakin Phatra Bank, you can compare the effects of market volatilities on Pato Chemical and Kiatnakin Phatra 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 Pato Chemical with a short position of Kiatnakin Phatra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pato Chemical and Kiatnakin Phatra.
Diversification Opportunities for Pato Chemical and Kiatnakin Phatra
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pato and Kiatnakin is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Pato Chemical Industry and Kiatnakin Phatra Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiatnakin Phatra Bank and Pato Chemical 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 Pato Chemical Industry are associated (or correlated) with Kiatnakin Phatra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiatnakin Phatra Bank has no effect on the direction of Pato Chemical i.e., Pato Chemical and Kiatnakin Phatra go up and down completely randomly.
Pair Corralation between Pato Chemical and Kiatnakin Phatra
Assuming the 90 days trading horizon Pato Chemical Industry is expected to under-perform the Kiatnakin Phatra. But the stock apears to be less risky and, when comparing its historical volatility, Pato Chemical Industry is 65.54 times less risky than Kiatnakin Phatra. The stock trades about -0.03 of its potential returns per unit of risk. The Kiatnakin Phatra Bank is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,075 in Kiatnakin Phatra Bank on September 12, 2024 and sell it today you would lose (1,900) from holding Kiatnakin Phatra Bank or give up 26.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Pato Chemical Industry vs. Kiatnakin Phatra Bank
Performance |
| Timeline |
| Pato Chemical Industry |
| Kiatnakin Phatra Bank |
Pato Chemical and Kiatnakin Phatra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pato Chemical and Kiatnakin Phatra
The main advantage of trading using opposite Pato Chemical and Kiatnakin Phatra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pato Chemical position performs unexpectedly, Kiatnakin Phatra 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 Kiatnakin Phatra will offset losses from the drop in Kiatnakin Phatra's long position.| Pato Chemical vs. Thantawan Industry Public | Pato Chemical vs. The Erawan Group | Pato Chemical vs. Jay Mart Public | Pato Chemical vs. Airports of Thailand |
| Kiatnakin Phatra vs. Communication System Solution | Kiatnakin Phatra vs. Techno Medical Public | Kiatnakin Phatra vs. Vintcom Technology PCL | Kiatnakin Phatra vs. Simat Technologies 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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