Correlation Between TISCO Financial and Krung Thai
Can any of the company-specific risk be diversified away by investing in both TISCO Financial 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 TISCO Financial and Krung Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TISCO Financial Group and Krung Thai Bank, you can compare the effects of market volatilities on TISCO Financial 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 TISCO Financial with a short position of Krung Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of TISCO Financial and Krung Thai.
Diversification Opportunities for TISCO Financial and Krung Thai
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TISCO and Krung is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding TISCO Financial Group 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 TISCO Financial 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 TISCO Financial Group 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 TISCO Financial i.e., TISCO Financial and Krung Thai go up and down completely randomly.
Pair Corralation between TISCO Financial and Krung Thai
Assuming the 90 days trading horizon TISCO Financial Group is expected to generate 0.36 times more return on investment than Krung Thai. However, TISCO Financial Group is 2.82 times less risky than Krung Thai. It trades about 0.0 of its potential returns per unit of risk. Krung Thai Bank is currently generating about -0.14 per unit of risk. If you would invest 9,650 in TISCO Financial Group on September 1, 2024 and sell it today you would earn a total of 0.00 from holding TISCO Financial Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TISCO Financial Group vs. Krung Thai Bank
Performance |
| Timeline |
| TISCO Financial Group |
| Krung Thai Bank |
TISCO Financial and Krung Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TISCO Financial and Krung Thai
The main advantage of trading using opposite TISCO Financial and Krung Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TISCO Financial 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.| TISCO Financial vs. Kasikornbank Public | TISCO Financial vs. Kiatnakin Phatra Bank | TISCO Financial vs. SCB X Public | TISCO Financial vs. Bangkok Bank Public |
| Krung Thai vs. The Siam Commercial | Krung Thai vs. Thai Oil Public | Krung Thai vs. Thai Union Group | Krung Thai vs. Kasikornbank 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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