Correlation Between SCG PACKAGING and Kiatnakin Phatra
Can any of the company-specific risk be diversified away by investing in both SCG PACKAGING 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 SCG PACKAGING and Kiatnakin Phatra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCG PACKAGING PCL NVDR and Kiatnakin Phatra Bank, you can compare the effects of market volatilities on SCG PACKAGING 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 SCG PACKAGING with a short position of Kiatnakin Phatra. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG PACKAGING and Kiatnakin Phatra.
Diversification Opportunities for SCG PACKAGING and Kiatnakin Phatra
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCG and Kiatnakin is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding SCG PACKAGING PCL NVDR 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 SCG PACKAGING 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 SCG PACKAGING PCL NVDR 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 SCG PACKAGING i.e., SCG PACKAGING and Kiatnakin Phatra go up and down completely randomly.
Pair Corralation between SCG PACKAGING and Kiatnakin Phatra
Assuming the 90 days trading horizon SCG PACKAGING PCL NVDR is expected to under-perform the Kiatnakin Phatra. In addition to that, SCG PACKAGING is 6.06 times more volatile than Kiatnakin Phatra Bank. It trades about -0.26 of its total potential returns per unit of risk. Kiatnakin Phatra Bank is currently generating about -0.28 per unit of volatility. If you would invest 5,450 in Kiatnakin Phatra Bank on September 1, 2024 and sell it today you would lose (450.00) from holding Kiatnakin Phatra Bank or give up 8.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCG PACKAGING PCL NVDR vs. Kiatnakin Phatra Bank
Performance |
| Timeline |
| SCG PACKAGING PCL |
| Kiatnakin Phatra Bank |
SCG PACKAGING and Kiatnakin Phatra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG PACKAGING and Kiatnakin Phatra
The main advantage of trading using opposite SCG PACKAGING and Kiatnakin Phatra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG PACKAGING 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.| SCG PACKAGING vs. PTT Public | SCG PACKAGING vs. Kasikornbank Public | SCG PACKAGING vs. The Siam Cement | SCG PACKAGING vs. OSOTSPA PCL NVDR |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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