Correlation Between Thai Coating and Kiatnakin Phatra
Can any of the company-specific risk be diversified away by investing in both Thai Coating 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 Thai Coating and Kiatnakin Phatra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Coating Industrial and Kiatnakin Phatra Bank, you can compare the effects of market volatilities on Thai Coating 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 Thai Coating with a short position of Kiatnakin Phatra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Coating and Kiatnakin Phatra.
Diversification Opportunities for Thai Coating and Kiatnakin Phatra
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Kiatnakin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thai Coating Industrial 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 Thai Coating 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 Thai Coating Industrial 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 Thai Coating i.e., Thai Coating and Kiatnakin Phatra go up and down completely randomly.
Pair Corralation between Thai Coating and Kiatnakin Phatra
Assuming the 90 days trading horizon Thai Coating is expected to generate 123.19 times less return on investment than Kiatnakin Phatra. But when comparing it to its historical volatility, Thai Coating Industrial is 39.51 times less risky than Kiatnakin Phatra. It trades about 0.05 of its potential returns per unit of risk. Kiatnakin Phatra Bank is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Kiatnakin Phatra Bank on September 3, 2024 and sell it today you would earn a total of 5,050 from holding Kiatnakin Phatra Bank or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Thai Coating Industrial vs. Kiatnakin Phatra Bank
Performance |
| Timeline |
| Thai Coating Industrial |
| Kiatnakin Phatra Bank |
Thai Coating and Kiatnakin Phatra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Coating and Kiatnakin Phatra
The main advantage of trading using opposite Thai Coating and Kiatnakin Phatra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Coating 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.| Thai Coating vs. PTT Public | Thai Coating vs. PTT Exploration and | Thai Coating vs. The Siam Cement | Thai Coating vs. CP ALL Public |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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