Correlation Between Tesla and Krungthai Card
Can any of the company-specific risk be diversified away by investing in both Tesla and Krungthai Card 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 Tesla and Krungthai Card into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Krungthai Card PCL, you can compare the effects of market volatilities on Tesla and Krungthai Card 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 Tesla with a short position of Krungthai Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Krungthai Card.
Diversification Opportunities for Tesla and Krungthai Card
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tesla and Krungthai is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Krungthai Card PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krungthai Card PCL and Tesla 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 Tesla Inc are associated (or correlated) with Krungthai Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krungthai Card PCL has no effect on the direction of Tesla i.e., Tesla and Krungthai Card go up and down completely randomly.
Pair Corralation between Tesla and Krungthai Card
Given the investment horizon of 90 days Tesla Inc is expected to generate 4.87 times more return on investment than Krungthai Card. However, Tesla is 4.87 times more volatile than Krungthai Card PCL. It trades about 0.26 of its potential returns per unit of risk. Krungthai Card PCL is currently generating about -0.11 per unit of risk. If you would invest 26,251 in Tesla Inc on August 27, 2024 and sell it today you would earn a total of 7,608 from holding Tesla Inc or generate 28.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. Krungthai Card PCL
Performance |
| Timeline |
| Tesla Inc |
| Krungthai Card PCL |
Tesla and Krungthai Card Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Krungthai Card
The main advantage of trading using opposite Tesla and Krungthai Card positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla position performs unexpectedly, Krungthai Card 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 Krungthai Card will offset losses from the drop in Krungthai Card's long position.The idea behind Tesla Inc and Krungthai Card PCL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Krungthai Card vs. Thai Energy Storage | Krungthai Card vs. Royal Orchid Hotel | Krungthai Card vs. Grand Canal Land | Krungthai Card vs. PRG 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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