Correlation Between Kasikornbank Public and KRUNG THAI
Can any of the company-specific risk be diversified away by investing in both Kasikornbank Public 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 Kasikornbank Public and KRUNG THAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasikornbank Public and KRUNG THAI FGN , you can compare the effects of market volatilities on Kasikornbank Public 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 Kasikornbank Public with a short position of KRUNG THAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasikornbank Public and KRUNG THAI.
Diversification Opportunities for Kasikornbank Public and KRUNG THAI
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kasikornbank and KRUNG is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and KRUNG THAI FGN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRUNG THAI FGN and Kasikornbank Public 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 Kasikornbank Public 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 FGN has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and KRUNG THAI go up and down completely randomly.
Pair Corralation between Kasikornbank Public and KRUNG THAI
Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 0.4 times more return on investment than KRUNG THAI. However, Kasikornbank Public is 2.51 times less risky than KRUNG THAI. It trades about 0.25 of its potential returns per unit of risk. KRUNG THAI FGN is currently generating about 0.01 per unit of risk. If you would invest 388.00 in Kasikornbank Public on September 4, 2024 and sell it today you would earn a total of 18.00 from holding Kasikornbank Public or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kasikornbank Public vs. KRUNG THAI FGN
Performance |
| Timeline |
| Kasikornbank Public |
| KRUNG THAI FGN |
Kasikornbank Public and KRUNG THAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kasikornbank Public and KRUNG THAI
The main advantage of trading using opposite Kasikornbank Public and KRUNG THAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasikornbank Public 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.| Kasikornbank Public vs. NAKED WINES PLC | Kasikornbank Public vs. SHIP HEALTHCARE HLDGINC | Kasikornbank Public vs. Diamondrock Hospitality Co | Kasikornbank Public vs. DiamondRock Hospitality |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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